| Consensus | Actual | Previous | |
|---|---|---|---|
| Sales Balance | -19% | -50% | -32% |
Highlights
The CBI's January survey suggests that retailers had an abysmal start to the year.
The headline sales balance slumped from December's minus 32 percent to minus 50 percent, more than 30 percentage points below the market consensus and matching its weakest mark since April 2020. This was the ninth straight sub-zero print. Actual sales were up a monthly 0.8 percent in the year ago period but even allowing for this the January reading does not bode well. Indeed, sales for the time of year, the best underlying guide, dropped from minus 25 percent to minus 41 percent, their worst outturn since May 2020.
The surprisingly poor January update will boost speculation about a cut in Bank Rate later in the year but a move next month remains very unlikely. Today's update also reduces the UK's RPI to minus 7 and the RPI-P to minus 20. Both values show recent economic activity in general failing to keep up with market expectations.
The headline sales balance slumped from December's minus 32 percent to minus 50 percent, more than 30 percentage points below the market consensus and matching its weakest mark since April 2020. This was the ninth straight sub-zero print. Actual sales were up a monthly 0.8 percent in the year ago period but even allowing for this the January reading does not bode well. Indeed, sales for the time of year, the best underlying guide, dropped from minus 25 percent to minus 41 percent, their worst outturn since May 2020.
The surprisingly poor January update will boost speculation about a cut in Bank Rate later in the year but a move next month remains very unlikely. Today's update also reduces the UK's RPI to minus 7 and the RPI-P to minus 20. Both values show recent economic activity in general failing to keep up with market expectations.
Market Consensus Before Announcement
The headline sales balance is seen improving to minus 19 percent.
Definition
The Confederation of British Industry (CBI) produces a monthly survey (and a more detailed quarterly report) analysing the performance of the UK retail, wholesale and motor trade sector. Volume sales, orders on suppliers, sales for the time of year and stocks are all covered and the quarterly survey also covers imports, selling prices, numbers employed, investment and business situation. Financial markets tend to concentrate on the CBI's annual sales growth measure as a leading indicator of the official retail sales report.
Description
This survey is a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. The monthly update provides a vital update on volume of sales, orders and stocks. Like the industrial survey, it carries significant weight in the formulation of economic policy at the Bank of England and within government as a highly respected barometer of high street trade. It is considered to be an advance indicator of retail sales although it is not well correlated with the official data on a monthly basis.
