UK retail sales in shock slump

LONDON: British retail sales unexpectedly slumped 1.9 percent in December from the previous month, sending the pound sliding as yesterday’s official data fed into fresh worries over Brexit. “The monthly picture... shows that all main retail sectors saw a decrease in the quantity bought, with the largest downwards contribution coming from non-food stores,” the Office for National Statistics (ONS) said in a statement. Analysts’ consensus forecast had been for a dip of 0.1 percent.

“Sterling is taking a pasting after a pretty shoddy set of retail sales figures for December,” noted ETX Capital senior market analyst Neil Wilson. “The pound... dived below $1.23 immediately following the ONS numbers, which showed the fastest pace of sales decline in five years.

“This is pretty alarming and was vastly wider than the 0.1 percent fall expected,” he added. The sales update was offset partly by solid quarterly and year-on-year comparisons. “Overall sales were up 5.6 percent in the fourth quarter and December’s figure was 4.3 percent higher from the previous year-getting a boost from tourists enjoying the benefits of the weak pound,” said Wilson.

“But it’s the sudden slowdown from November that is discouraging and this has dented sentiment around the pound.” Sterling has endured a volatile week, slumping to threemonth low points before and after British Prime Minister Theresa May fleshed out her plans for Britain exiting the European Union. In a busy week for UK data, annual inflation has jumped to 1.6 percent-the highest level in two and a half years-while unemployment sits at 4.8 percent, a low since 2006. But it is the retail figures which have shocked most.

“UK retail sales volumes were terrible in December... much worse than expected,” said Scotiabank strategist Alan Clarke. “We know from the CPI (inflation) data earlier in the week that prices rose more than expected in December and now we also know that sales volumes fell. — AFP