UK Retail Sales Conditions Improve to Above Average

British retailers are reporting the best business conditions since before the financial crisis erupted in 2007 as low inflation and rising wages prompt a surge in consumer spending.

The CBI said in its monthly snapshot of the distributive trades that high street and online sales volumes were well above normal for the time of year, with food and clothes outlets notching up particularly strong performances.

The employers’ organisation said 41% of the 119 retailers polled said business was above average for a September, against 6% who said they were below average. The balance of +35 percentage points was the highest since April 2007.

Retailers believe consumers will continue to spend freely in October and are planning to increase orders with suppliers at the fastest rate in almost five years.

The strong CBI survey followed weak official data for retail sales, which showed a slowdown in high street activity in July and August.

Rain Newton-Smith, the CBI’s director of economics, said: “Low inflation and the recovery in wage growth are helping to stimulate consumer demand, but the slowdown in the global economy and tight margins mean retailers won’t get ahead of themselves as we head into autumn.

“Clothing and the food and drink sectors have led the way, and with the general outlook for the UK economy remaining positive, the expectation is that there will be further encouraging results next month.”

via The Guardian

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza