UK Retail Sales Hint at Robust Consumer Confidence

Market Trends - 24/03/2016

UK retail sales fell less than expected in the month of February, hinting at strong underlying growth in consumer spending despite continued uncertainty. Data released from the Office for National Statistics today showed UK sales fell -0.40% on the month, less than the forecasted -0.70% but down from January’s 2.30%. The decline retail sales saw weaker demand for clothing due to seasonal weather trends. On a yearly basis, UK retail sales excluding auto fuel increased 4.10%, more than the forecasts of 3.50% but down from January's 5.0% increase, while headline retail sales had similar results compared to expectations.

ONS head of retail sales Melanie Richards commented that UK retailers had another strong month in February, compared to a year ago with the exception of clothing and footwear. On a monthly basis, the biggest declines were seen in the sale of fuel and food stores with the clothing sector seeing one of the worst performances in the last decade. The retail sales data is likely to be reassuring to the Bank of England's policymakers that consumer confidence is robust despite doubts about the economy and the uncertainty surrounding the British upcoming referendum. The British Pound closed three days with losses this week, and following the release of retail sales is trading bullish at 1.413.


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