20 Feb 2015
UK retail sales soft, but maintains a strong trend – ING
FXStreet (Barcelona) - James Knightley, Senior Economist at ING, reviews the UK retails sales data release, and comments that the strong trend with growth rising to 5.4% yoy, combined with the expectedly strong consumer spending outlook would be positive for GDP growth in 2015.
Key Quotes
“UK retail sales for January are a little weaker than expected, falling 0.3%MoM versus the consensus forecast of a 0.2% decline. There was also a two tenths of a percentage point downward revision to December’s number.”
“Nonetheless, the trend is strong with YoY growth rising to 5.4% from 4.0%. There were also some signs of a strengthening economy within the government borrowing numbers with the UK recording the biggest monthly budget surplus in seven years.”
"The detail shows a fairly mixed performance for retailers with sales excluding fuel falling by 0.7%MoM. This was primarily caused by a 0.9% drop in food sales and a 3.3%MoM drop in “other stores” although the latter tends to be a very volatile component in any case given it jumped 4.9% in December.”
“In terms of the outlooks for consumer spending, we remain optimistic given rising real incomes and employment while the impending increase in the tax free personal allowance will also put more money in peoples’ pockets.”
“Consumer confidence is already back to pre-crisis highs so it looks as though GDP growth will be consumer led in 2015.”
Key Quotes
“UK retail sales for January are a little weaker than expected, falling 0.3%MoM versus the consensus forecast of a 0.2% decline. There was also a two tenths of a percentage point downward revision to December’s number.”
“Nonetheless, the trend is strong with YoY growth rising to 5.4% from 4.0%. There were also some signs of a strengthening economy within the government borrowing numbers with the UK recording the biggest monthly budget surplus in seven years.”
"The detail shows a fairly mixed performance for retailers with sales excluding fuel falling by 0.7%MoM. This was primarily caused by a 0.9% drop in food sales and a 3.3%MoM drop in “other stores” although the latter tends to be a very volatile component in any case given it jumped 4.9% in December.”
“In terms of the outlooks for consumer spending, we remain optimistic given rising real incomes and employment while the impending increase in the tax free personal allowance will also put more money in peoples’ pockets.”
“Consumer confidence is already back to pre-crisis highs so it looks as though GDP growth will be consumer led in 2015.”