UK core retail sales largely in-line with forecasts in August
Thu 20 Sep 2012
LONDON (SHARECAST) - UK retail sales fell by 0.2% month-on-month in August (Consensus: -0.3%), according to the latest data out from the Office for National Statistics (ONS).
However, in year-on-year terms total retail sales grew by 2.7% (Consensus: 2.9%).
Furthermore, the previous month´s year-on-year reading has been revised down to show a rise of only 2.3%, instead of the preliminary estimate of 2.8%.
However, and as regards that revision, economists at Nomura point out that it was partially due to an upward 0.2 percentage point revision to data for July 2011 (as well as for estimates going back to April of this year).
Core sales, which exclude oil, dropped 0.3% month-on-month, as expected, and increased at a 3.1% year-on-year pace (Consensus: 3.2%).
Here, again, the previous month´s reading was also revised down, to growth of 2.8% versus the 3.3% initially thought.
As regards the outlook for retail sales, Nomura economists add that: "With sales back at their trend level and the weather holding up well, we provisionally expect another modest month of sales growth in September."
For their part, economists at Barclays Research indicate that: "sales are likely to grow again in Q3, supporting our expectations that private consumption will increase in Q3 following two quarters of falls. However, we remain cautious about the retail sector outlook (...) with inflation likely to be stickier than previously thought for next year and earnings growth expected to remain subdued, given the poor state of the labour market, we think the real household income squeeze will be prolonged further. As a result, we expect the outlook for retailers to remain soft."