The euro edged lower against the British pound on Friday after Germany’s retail sales fell 1.2% month on month in real terms in July, compared with analysts’ forecast of a 0.5% decline. Data from Destatis showed sales were also down 2.2% from July 2023, while June’s 1.6% increase was revised, suggesting the rebound did not persist. Retail sales are a key gauge of private consumption, which has been weakened by inflation’s impact on purchasing power and cautious household spending. EUR/GBP slipped to around 0.8450, down 0.2% on the day. The figures add to expectations that the ECB (European Central Bank) may need to cut interest rates further to support growth, potentially weighing on the euro. The pound has received support from relatively resilient UK economic data and the Bank of England’s cautious approach to easing. Analysts caution that one month of German data does not establish a trend, and upcoming inflation and GDP figures will be important for the outlook. Traders will focus on next week’s euro-zone inflation data, as well as future economic releases and central-bank communications. EUR/GBP could remain under pressure if German data stays weak and the ECB signals further easing, but the pair could find support if UK data disappoints or the Bank of England adopts a more dovish stance.