U.K. Retail Sales Rebound

U.K. nominal retail sales growth bounced back in August, rising by 0.2% after a 0.3% July decline. The sequential growth rates of retail sales have been extremely steady over three months, six months and 12 months around and just above the 2.5% pace. Excluding motor vehicles and parts, nominal sales growth has slowed from 4% over 12 months to 2.3% over three months. Food, beverages and tobacco sales have been declining steadily and more aggressively with the decline of 0.3% over 12 months, turning to a decline of 1.8% at an annual rate over three months. Clothing and footwear purchases, however, continue to be quite strong and have accelerated from their 7.2% pace over 12 months. Spending in that category is growing at a nearly 19% rate over six months and 15% pace over three months.

Inflation-adjusted sales volumes are depicted in the chart above. The year-over-year growth rates remain high. In August, sales volumes grew by 0.4%, accelerating from their 0.1% pace in June and July. The volume growth rate has been slipping steadily, however. Volume growth is at 4% over 12 months, 3.2% over six months and 2.3% over three months.

U.K. data have turned a little mixed recently. Today September U.K. industrial orders, in a Confederation of British Industry survey, fell back to indicate a negative balance between the number firms with orders increasing and the numbers with orders decreasing. Mortgage lending still seems to be moving ahead with solid growth rates on mortgage extensions.

Today, however, economic statistics are not going to be in the headlines that investors look to read about the United Kingdom. Today they will be looking for stories and polls about the vote in Scotland as they wonder exactly what the U.K. is destined to be in the future. The polls on the `yes' - `no' balance have been quite close. Some have concerns that they may not have properly weighted the influence of potential younger voters. However, all the speculation is due to come to a halt later today as the actual results of the vote are made known. This poll and any information about it that the press can scrabble up today, is going to be what people are interested in, not economic figures. And that's appropriate. This is an extraordinarily important time for both Britain and for Scotland.