Why did the British pound crash earlier today?

[Lawrence McOchillo]

I would like to know why the pound crashed today and its long-term prospects.

[Simon Mugo]

The Sterling pound crashed earlier today after the release of disappointing UK retail sales data. The country witnessed a slump in retail sales during the Festive season in December, which shocked both analysts and investors. Most analysts expected British retail sales to expand slightly, or at the very least to remain flat, instead of a posting a 0.6% decline.

The pound's crash was accelerated by widely held expectations that the Bank of England was on track to cut interest rates later this month. An interest rate cut would signal that the BoE's monetary policy committee is worried about the UK's future growth prospects. The looming Brexit and the upcoming trade talks with the EU starting in February also weighed on the pair given the hard-line positions taken by both the EU and Boris Johnson.