Forex News: U.K Retail sales rebounded

In the UK retail sales rebounded more than economists forecast in February with the biggest jump since May 2008 as Britons raised spending on goods from electrical items to auto fuel. Sales rose 2.1% from January, when they slumped by a more-than-previously-expected 3% in the longest cold snap for three decades. Excluding fuel, sales rose 1.6%, the most since June.

The increase in sales for February was led by an 11.2% jump at household goods stores, the statistics office said. Auto fuel sales rose by 9.1% and textile, clothing and footwear shops had a 1.1% gain. Food stores showed a 1.2% drop, the most since June 2008.

The January sales drop was revised down from a decline of 1.8% previously reported because of late returns of data from retailers, the statistics office said.

Next, the U.K.’s second-biggest clothing retailer said today full-year earnings rose 20% as it expanded Internet and catalog sales and sold more goods at full price in stores.

UK Chancellor of the Exchequer Alistair Darling, presenting his budget report to Parliament Wednesday said that to start cuts in public spending before the recovery was assured “would be both wrong and dangerous.” The ruling Labor Party’s resistance to faster spending cuts have helped it narrow the lead of the opposition Conservatives ahead of a general election due by June.

Jobless claims fell last month at the fastest pace since 1997, though the number of people in work in the three months through January dropped to a four-year low of 28.9 million.

In the forex online market yesterday the Pound continued to decline against the US Dollar. It fell 0.50% to close at GBP 1.4811. At also dropped 0.10% against the Euro closing the day at GBP 0.8960.

Yesterday was day one of the two day EU economic summit being held in Brussels. News has emerged that all 16 Euro Zone countries have backed a financing plan to help debt-laden Greece. The plan will also include assistance from the International Monetary Fund.

The safety net would total up to 22bn Euros. It would apply only if market lending to Greece dried up. Euro Zone nations would grant co-ordinated bilateral loans, totaling some two-thirds of the funding, French President Nicolas Sarkozy said.

Greek PM George Papandreou called it "a very satisfactory" move. The president of the European Council, Herman Van Rompuy, said the deal was significant "not just for Greece, but for the stability of the Euro Zone". He added that the deal should tell markets to "have confidence that the Euro Zone will never abandon Greece".

European Commission President Jose Manuel Barroso said he was "extremely happy that we've reached this deal", calling it "a right decision". The deal still needs to be backed by the rest of the 27-member EU. The Euro Zone had avoided seeking an IMF loan for Greece, preferring a European solution and anxious to maintain global confidence in the euro.

Chancellor Merkel has stressed the need to learn lessons from the crisis, saying that she wants a treaty change to allow sanctions to come into force should a Euro Zone country ever default on its debts. Mr. Papandreou urged EU leaders to act to stabilize the Euro.

The single currency hit a 10-month low against the US Dollar on Wednesday after a credit downgrade for Portugal, which is also struggling with heavy debts. The Euro reversed a three day slide against the US Dollar in trading yesterday, gaining 0.43% to close at EUR 1.3329.