Earnings including bonuses rose at a faster pace

Paresh Davdra is the Dealing Director of RationalFX, Currency Specialists. Tuesday 24th February 2015 07:54 EST

UK retail sales fell 0.3% in January from the previous month, according to figures from the Office for National Statistics. The decline in sales follows a 0.2% rise in December 2014. The January figure was a 5.4% rise on a year earlier. UK High Street shops have been reducing their prices in an effort to attract customers, the figures indicate. Average store prices were 3.1% cheaper than last January.

This was the largest year-on-year fall since consistent records began in 1997. On-line sales in January were also up 12% compared to January 2014.

Greece's government prepared reform measures on Sunday to secure a financial lifeline from the euro zone, but was attacked for selling "illusions" to voters after failing to keep a promise to extract the country from its international bailout.
Leftist Prime Minister Alexis Tsipras has insisted Greece achieved negotiating success when Eurozone finance ministers agreed to extend the bailout deal for four months, provided it came up with a list of reforms by Monday. A government official said the reforms would include a crackdown on tax evasion and corruption.

Greeks reacted with relief that Friday's deal averted a banking crisis which fellow euro zone member Ireland said could have erupted in the coming week. This means Tsipras has stood by one promise at least to keep the country in the Eurozone.
The Brussels deal opens the possibility of lowering a target for the Greek primary budget surplus, which excludes debt repayments, freeing up some funds to help ease the effects of 25 percent unemployment and pension cuts. It also avoids some language which has inflamed many Greeks, angered by four years of austerity demanded by foreign creditors.
The Eurozone private sector expanded at the fastest pace in seven months led by rising new orders but firms are still cutting prices, suggesting the ECB will have a tough time spurring inflation. The jump in activity will provide a glimmer of hope for policy makers who have struggled to steer the monetary union toward growth with modest inflation, but may also support the European Central Bank's decision to buy sovereign bonds.

The Dollar has remained relatively flat despite fewer Americans than forecast filed applications for unemployment benefits last week, showing the labour market is making progress. Employers are holding on to workers amid gains in household purchases, the biggest part of the economy. The improvement in the job market, coming off its best year for hiring since 1999, was noted by Federal Reserve policy makers at their January meeting as they debated when to begin raising interest rates.

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