* Graphic: Sterling and gilt yields bit.ly/2dgAXn1
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv
LONDON, May 18 Sterling edged lower against the
dollar on Thursday as investors awaited a further reading on
consumer spending in Britain, now seen slowing after it propped
up the UK economy in the months following the Brexit vote.
High inflation owing to sterling's plunge after the EU
referendum and stubborn wage growth since the 2008 financial
crisis have crimped consumers' spending, with British retail
sales posted the biggest quarterly fall in seven years during
the first three months of 2017.
Sterling was 0.1 percent lower at $1.2962 by 0737
GMT, after again testing the $1.30 mark on Wednesday.
It was 0.2 percent higher at 85.895 pence per euro.
Retail sales for April are expected to increase 1 percent,
according to a Reuters poll of economists.
Investors note the retail sales data has become increasingly
volatile, making identifying a trend difficult. The late timing
of Easter this year has also added to seasonal adjustments for
the data, analysts said.
"Any indication of domestic demand conditions to have
weakened by more than anticipated is likely to keep the
medium-term price outlook capped," Credit Agricole strategists
wrote in a note to clients.
"As such incoming data may support the BoE’s view about
higher inflation as being temporary. From that angle we see
scope of central bank monetary policy expectations to remain
broadly capped and such prospects are likely to prevent the
pound from facing bigger upside risks."
(Reporting by Ritvik Carvalho; editing by Ralph Boulton)