| Consensus | Actual | Previous | |
|---|---|---|---|
| Sales Balance | -20% | -43% | -24% |
Highlights
This month's survey was much weaker than expected. The headline index was down sharply from June's minus 24 percent and, at minus 43 percent, fully 23 percentage points below the market consensus. This is its worst reading since April. Moreover, since actual sales fell a monthly 0.9 percent in July 2023, there should have been some upside bias to today's results. Retailers also see another poor month in August with the forecast index at just minus 32 percent, the worst outlook since February.
Bad weather may have had a small negative impact on today's report but the underlying message is clearly soft. Indeed, the July update leaves both the UK RPI (minus 29) and RPI-P (minus 34) quite deep in negative surprise territory, showing overall economic activity still running a good deal cooler than market expectations. More food for the doves ahead of Thursday's BoE MPC announcement.
Bad weather may have had a small negative impact on today's report but the underlying message is clearly soft. Indeed, the July update leaves both the UK RPI (minus 29) and RPI-P (minus 34) quite deep in negative surprise territory, showing overall economic activity still running a good deal cooler than market expectations. More food for the doves ahead of Thursday's BoE MPC announcement.
Market Consensus Before Announcement
The sales balance is expected to rise from minus 24 percent in June to minus 20 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.
