LONDON (Jan 20): Britain's pound fell on Friday as weak retail sales data capped one of the most turbulent weeks in decades for the currency.

Shopping sales saw their biggest fall since April 2012, dropping 1.9% month-on-month in December, the official national data showed, far below economists' forecasts in a Reuters poll for a 0.1% decline.

That took the shine off what was an otherwise solid quarter for the UK economy and contrasted with trading reports from major retailers who have mostly reported a strong Christmas season.

Finance minister Philip Hammond said that sterling's sharp falls since the Brexit vote last June were feeding through to inflation and would have an impact on consumer behaviour.

The pound baulked, dropping 0.3% to just below US$1.23 versus the US dollar and 86.55 pence per euro. That capped a week that has included both its biggest jump in decades and two major beatings.

"We have had a big slide in sterling and that is bound to start showing up in consumer confidence. Our view is that this is going to be a slow burner," said Unicredit's global head of FX strategy Vasileios Gkionakis.

"At current levels I retain a bearish bias, on the fundamental front nothing has really changed," he added, saying the political noise was also likely to increase as Britain's government prepares to trigger the start of the EU exit process.

Signals that Britain is planning to fully remove itself from the European Union's single market when it leaves the bloc sparked a slump in the pound on Monday.

That then turned into its biggest jump since the 1990s on Tuesday when Prime Minister Theresa May backed that line in a major speech, but said parliament would get a say on the post-Brexit deal and firms would be given time to transition.

Four of the world's top banks have since said they plan to move around a combined 7000 staff out of London if it can't retain lucrative banking access to the EU bloc.