Global| Jun 19 2009UK Retail Sales Fall And Markets Quiver
Summary
UK retail sales fell unexpectedly in May and, combined with news of greater public sector borrowing, markets sold off with particular pressure on the pound sterling. The UK has been posting some of the best economic numbers in Europe [...]
UK retail sales fell unexpectedly in May and, combined with
news of greater public sector borrowing, markets sold off with
particular pressure on the pound sterling. The UK has been posting some
of the best economic numbers in Europe but with the slippage in retail
sales some of that optimism has faded. Still there are upbeat signs in
the UK economy.
One sign of optimism is still retail sales themselves.
Although the Yr/Yr figures are worsening the six months trends have
barely turned lower and three-month trends are sill quite strong and
advancing. Perhaps the disappointment is more about markets getting
ahead of themselves than about any real disappointment in retail sales
trends themselves.
The UK housing market is showing some signs of stirring.
Mortgage lending still fell in the recent month (May) but lenders
suspect that demand for purchases has been increasing. It is mostly
re-mortgaging activity that has been slackening off. It is reported
that for every home for sale there are four who are looking to buy
according to a survey by the U.K.'s National Association of Estate
Agents on Thursday. There are still signs of an upswing in the UK.
The CBI industrial trend survey is still very weak but its
index moved up to -51 from -56 in May as well.
On balance the reaction to retail sales may prove to be
excessively pessimistic since improving trends still seem to the rule,
not the exception, in the UK.
| UK Real and Nominal Retail Sales | ||||||||
|---|---|---|---|---|---|---|---|---|
| Nominal | May-09 | Apr-09 | Mar-09 | 3-Mo | 6-Mo | 12-Mo | Yr Ago | Quarter 2-date |
| Retail Total | -0.3% | 0.6% | 1.2% | 6.3% | 2.4% | -1.1% | 6.4% | 4.5% |
| Food Bev & Tobacco | 0.6% | 0.2% | 0.8% | 6.6% | 4.8% | 3.8% | 8.3% | 7.6% |
| Clothing footwear | -2.3% | -1.0% | 1.3% | -7.9% | 1.7% | -8.5% | 8.5% | -9.3% |
| Real | ||||||||
| Retail Ex Auto | -0.7% | 1.0% | 1.2% | 6.0% | 2.0% | -1.7% | 6.1% | 3.2% |
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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