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Economy in Brief

U.K. Retail Sales Make a Surprising Gain
by Robert Brusca  June 18, 2015

U.K. retail sales rose by 0.2% in May, bucking expectations that sales would drop. Sales are now up for two months in a row for the first time since November of last year.

U.K. retail sales offer up no clear pattern of acceleration or deceleration. Overall sales are up over three months, down over six months, and up over 12 months. Excluding motor vehicles and parts, however, sales are consistently rising on those horizons and are slightly decelerating.

Expressed in real terms, U.K. sales trends also are showing deceleration from a pace of 4.5% over 12 months to 2.6% over six months to 2.2% over three months. Despite the two month rise in sales, U.K. sales patterns have not turned the trends higher.

In the quarter-to-date, sales are running at a strong pace of 4%. Excluding motor vehicles and parts, trends are up at the same 4% pace. And real sales are up at a 4% pace as well.

U.K. retail sales may have provided an upside surprise in May, but it is not a surprise than changes any significant trends. Still, growth in the quarter-to-data is quite a bit stronger than recent three-month and six-month growth rates and that with only one month left to complete the Q2 picture. From these various fragments of growth rates, it is hard to paint a consistent picture of what U.K. retail sales are doing. For now there are too many growth rate cross currents to pin down the underlying trend.

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