ForexSpace.com - It isn’t only forex traders and top forex brokers based in the UK who’ve been splashing around the wettest ever April mumbling darkly about how, as droughts go, the one currently being experienced across the country has been a pretty damp affair! Exponents of Britain’s favourite pastime, (no, not banker bashing) shopping, it seems have likewise been rained off. Figures just out from the British Retail Consortium revealed that the country’s retailers suffered their biggest sales downturn for more than a year, with the hardest hit being high street fashion, children’s clothing and footwear, which saw the worst trading since January 2008, the BRC said.

According to the UK Met Office, April registered the largest amount of rainfall for the month since records began in 1910, so it is perhaps not surprising, therefore, that the damp weather also dampened demand for strappy frocks, especially as many shoppers had already splurged on summer-wear in the earlier March heat wave.

Across the board, April’s like-for-like sales dropped a "disappointing" 3.3 percent - the most sluggish performance since March the previous year. However, it should be noted that this period was pitched against an unusually tough comparative with 2011, when a warm spell and the Royal Wedding conspired especially to drive sales of party wear and food through the roof.

Online retailers also saw demand slow, while supermarkets felt the pain despite the cold weather boosting sales of winter warmers, such as hot drinks, porridge, meat for stewing and soup. However, the situation for electronics items remained downbeat, despite TV sales gaining a fillip from the digital switchover in the South East, and strong demand for the latest iPad and Kindle.

It looks certain that the BRC’s gloomy data was exacerbated by the recent confirmation that the UK re-entered recession in Q1 of this year. As BRC director general Stephen Robertson (pictured) said: "Consumers, struggling to balance their household budgets, remain reluctant to spend unless they really have to, and the weakening economy is likely to mean people are even more cautious about their finances."

Attempting to add a glimmer of sunny optimism, the BRC’s Robertson added how credit-squeezed retailers are hoping that the “diamond jubilee, Olympics and Euro 2012 football championships in coming months will boost demand and help the "feel-good factor" return.”

A further hint of silvery lining was provided by sales of floor coverings and homewares, which the BRC data suggests was boosted by the depressing weather inspiring homeowners to indulge in that other great British passion for a spot of DIY.

However, it appears to be the country’s soggy gardens – already languishing muddy and unloved amid the ongoing hosepipe ban – where one of the biggest effects have been felt. The Garden Centre Association says sales of plants are down some 30 percent, with the would-be green-fingered – exiled indoors – have little more to do than stare out of their windows at their waterlogged swords. "Everything has ground to a halt," says Garden Centre Association chief executive Phil Slinger, somewhat ironically.

From a sterling perspective today, whilst a soggy theme prevails in respect of EUR/GBP, as Jeremy Boulton, FX Analyst with Thomson Reuters tell me, “labeling sterling as a safe haven play against mounting euro zone risks worked well when specs were short. However,” warns Boulton, “they are now long pounds, and getting longer. Where there was once presumed safety in sterling, the growing long position is surely just another risky asset to be purged should the euro meet expectations and continue falling.  Order-wise there is talk of large stops in cable below 1.6080, and strong demand ahead of  0.8000 in EUR/GBP. The tilting point seems close by with a break at 1.2950 for EUR/USD very likely to hit cable hard.”

Drew Hillier. Editor