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Economy in Brief

UK Retail Sales Take A Sett Back In November But Cling To Trend Rise
by Robert Brusca December 17, 2009

UK retail sales volumes fell by 0.3% in November after having rise in October. Sales volumes have risen twice in the last three-months and seven times in the last 12-months.

The three-month rate of growth has dipped below the six-month rate of growth but still exceeds the 12-month growth pace. Clothing and footwear sales, however, are clearly losing momentum having dropped in the last three months. Retail ex-auto sales are off from their six month pace but nearly even with their 12-month pace.

In the new quarter, Sales are growing at a pace of 3% to 3.5%. That should help to underpin Q4 GDP growth.

In a separate report, the CBI survey of the distributive trades produced diffusion results saying that November sales were flat with those in October. That of course is more ambitious that the sales count from National Statistics (above). The outlook in the CBI framework was negative, however.

A poll of UK inflation expectations found that expectations were stuck at 2.4% for the third consecutive quarter. While this is above the BOE ceiling pace for inflation (of 2%) the Bank has admitted that there would be some temporary overshoot to which it will not respond. It is heartening that as inflation has risen in the UK, inflation expectations have not. BOE credibility seems to be well intact despite the damage done in the financial crisis.

UK Real and Nominal Retail Sales Quarter
Nominal Nov-09 Oct-09 Sep-09 3-MO 6-MO 12-MO YrAGo 2-date
Retail Total -0.3% 0.5% 0.4% 2.9% 4.0% 2.6% 2.0% 3.2%
Food Bev & Tobacco 0.2% 0.2% 0.1% 2.3% 2.2% 3.4% 7.3% 2.5%
Clothing footwear -2.0% 1.5% 0.4% -0.7% 1.5% 1.4% -1.7% 0.3%
Retial Ex auto -0.4% 0.6% 0.4% 2.9% 5.3% 3.1% 0.8% 3.6%
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