| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.5% | 0.4% | -1.2% | -1.1% |
| Year over Year | -1.2% | -1.4% | -3.2% | -3.1% |
Highlights
UK retail sales volumes rose by 0.4 percent in August, short of the consensus forecast of a 0.5 percent rise. On an annual basis, sales fell by 1.4 percent, weaker than the consensus estimate of a 1.2 percent decline.
That took the RPI to minus 30 from minus 13 previously, while the RPI-P fell to minus 21 from 3.
The August rebound followed a 1.1 percent slump in July (upwardly revised from the previously reported 1.2 percent fall), dampened by unusually rainy weather, although retailers also reported that rising living costs have taken a toll on sales. July year-over-year sales were revised to show a 3.1 percent fall, a touch better than the initially reported 3.2 percent decline.
Over the three months ending in August, sales volumes remained in the black, rising 0.3 percent over the previous three months.
Food store sales accounted for much of the August improvement, rising by 1.2 percent, while non-food sales expanded by 0.6 percent.
The retail data come a day after the Bank of England left its benchmark rate unchanged at 5.25 percent, an outcome thought unlikely at the beginning of the week. That was before the release of an unexpected fall in inflation to 6.7 percent from 6.8 percent in July.
The vote was close, with five members of the rate-setting monetary policy committee choosing to leave rates on hold; four voted for a 25-basis point rate hike to 5.5 percent.
Notably, the five majority voters did not cite consumer spending as a reason to pause the tightening cycle. This dovish contingent was swayed by a loosening labour market and weak purchasing managers' data.
That took the RPI to minus 30 from minus 13 previously, while the RPI-P fell to minus 21 from 3.
The August rebound followed a 1.1 percent slump in July (upwardly revised from the previously reported 1.2 percent fall), dampened by unusually rainy weather, although retailers also reported that rising living costs have taken a toll on sales. July year-over-year sales were revised to show a 3.1 percent fall, a touch better than the initially reported 3.2 percent decline.
Over the three months ending in August, sales volumes remained in the black, rising 0.3 percent over the previous three months.
Food store sales accounted for much of the August improvement, rising by 1.2 percent, while non-food sales expanded by 0.6 percent.
The retail data come a day after the Bank of England left its benchmark rate unchanged at 5.25 percent, an outcome thought unlikely at the beginning of the week. That was before the release of an unexpected fall in inflation to 6.7 percent from 6.8 percent in July.
The vote was close, with five members of the rate-setting monetary policy committee choosing to leave rates on hold; four voted for a 25-basis point rate hike to 5.5 percent.
Notably, the five majority voters did not cite consumer spending as a reason to pause the tightening cycle. This dovish contingent was swayed by a loosening labour market and weak purchasing managers' data.
Market Consensus Before Announcement
Retail sales in August are expected to rise 0.5 percent on the month after falling 1.2 percent in July which was more than double the expected decline.
Definition
Retail sales measure the total receipts at stores that sell durable and nondurable goods. The data include all internet business whose primary function is retailing and also cover internet sales by other British retailers, such as online sales by supermarkets, department stores and catalogue companies. Headline UK retail sales are reported in volume, not cash, terms but are available in both forms. The data are derived from a monthly survey of 5,000 businesses in Great Britain. The sample represents the whole retail sector and includes the 900 largest retailers and a representative panel of smaller businesses, including internet sales. Collectively, all of these businesses cover approximately 90 percent of the retail industry in terms of turnover.
Description
With consumer spending a large part of the economy, market players continually monitor spending patterns. The monthly retail sales report contains sales data in both pounds sterling and volume. UK retail sales data exclude auto sales.
The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.
Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps apparel sales are showing exceptional weakness but electronics sales are soaring. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.
The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.
Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps apparel sales are showing exceptional weakness but electronics sales are soaring. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.
