The pound sterling suffered a sharp slump against all other major currencies in the European session this Friday or in 22 of April. GBP/USD plunged more than 1 percent to a new low level. 

That was since November 2020 at the level of 1.2862. GBP/JPY also fell more than 1% based on a release, while the EUR/GBP jumped to its highest level since the beginning of the month.

The first bad news for Sterling came in the form of March 2022 retail sales data that missed the consensus estimates. Elsewhere, the UK retail sales slumped by 4% For a monthly period.

Whereas the consensus only expected a decline of 0.5% from that. The February's retail sales data was also revised down from minus 0.3% to minus 0.5% in a release reported before.

The UK Consumers Confident data was also Slipped

Some other economic data in the United States further reinforced market concerns. The example is consumer confidence data which fell to a low record since the 2008 Financial Crisis.

That was suggesting a potential significant slowdown in economic growth. Meanwhile, the PMI survey done lately revealed a quiet Sharp decline as well. 

This decline happened in the manufacturing and service sectors. The risk of a fall in the pound increases with a number of specific negative developments that provide some reasons for GBP sentiment to deteriorate over the coming days and weeks.

That opinion was said by Derek Halpenny as a Head of Global Market Research at MUFG. In the other side, most of the market participants also agree with that statement. 

Some Factors Affect the Economic Slowdown in UK

Chris Williamson, a Chief Business Economist at S&P Global who manages the PMI survey results, commented that a survey data suggests the market cooled in the pace of UK economic growth.

That is especially during April, caused by sudden slowing demand which is happening lately. Many analysts have actually predicted an economic slowdown in the United Kingdom this year.

It was due to some factors such as the impact of the Russian-Ukrainian war and the decline in people's purchasing power. However, the situation appears to be deteriorating much faster than the public expected. 

That is likely to urge the Bank of England Or known as BOE to reconsider plans for further rate hikes. It is also about the 50 basis points increase as a possibility at the BoE MPC meeting in May.

Elsewhere, OPEC+ tries to solve the Market Concerns about Oil

The Forecasts of lower economic growth by the IMF coupled with a 4.7 million barrel drop in strategic oil reserves on Monday have sparked some jitters. That fact was stated by Phil Flynn, an analyst at Price Futures Group.

The negative sentiment in the oil market cannot even be suppressed by OPEC+ output which has decreased by 1.45 million barrels per day (bpd). It was due to Russian sanctions. 

The OPEC+ in this case plans to increase an output by 432,000 bpd in May. It means that they are ruling out the insistence of consumer countries that want the greater output increases.

Oil Is Also Hit by the USD Bullish and China’s Condition 

The U.S. dollar is at a 2-year high position and causes the price of commodities priced in dollars to become increasingly expensive for holders of non-dollar currencies. 

The market is optimistic that the Fed will raise their interest rates by 50 basis points in May. The Fed's rate hike is also expected to be even more aggressive as recent America's inflation data is already increasingly worrying.

Another catalyst that has also pushed down the oil prices is the news that China's economy is being overshadowed by a slowdown this year. It’s less than convincing economic performance will certainly affect the outlook for global oil demand.