U.K Retail Sales Bounce Back in October

Data this morning showed that U.K. retail sales rebounded last month, as the strong performance of the second-hand sector offset a drop in sales of clothes and footwear.

Retail sales grew +0.3% on the month in October, beating market expectations of +0.1% growth and bouncing back from September’s -0.7% declines.

Digging deeper, second-hand stores had a particularly strong month, driving the overall growth in sales. Clothing stores disappointing month can be attributed to unseasonably warm weather.

However, on an annual basis, retail sales posted its first decline in four-years, and was down by -0.3%.

Consumer price growth stood at +3% in October, the joint-fastest pace of inflation in nearly six-years.

Note: U.K’s economy has slowed visibly this year as consumers come under pressure from accelerating inflation driven by the pound’s steep decline in the wake of the Brexit referendum last year.

Pounds Reaction

Sterling is trading a tad higher, but the gains are limited, as today’s data should not change investors’ expectations that the Bank of England won’t raise interest rates again any time soon, while concerns about Brexit uncertainty remains.

GBP/USD is last up +0.14% at £1.3189, up from £1.3159 before the release, and is expected to run into some strong offers just above the psychological £1.3200 handle. EUR/GBP trades down -0.3% at €0.8922.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell