U.K Retail Sales Weak in Q3, Pound Falls

Data from the Office for National Statistics this morning showed that U.K retail sales fell by more than expected in the month of September and points to weakness in the broader economy during Q3.

Retail sales were -0.8% lower than in August, and were just +1.2% higher than a year earlier. The consensus had expected monthly sales volumes to remain flat.

The decline was driven largely by a fall in sales of non-essential items, such as spectacles, souvenirs, weapons and collectables.

The weak performance means retail sales will contribute just +0.03% to third-quarter economic growth, roughly a third the contribution in the second quarter, the ONS says.

Today’s figures would suggest that the British consumer might be retrenching amid meager wage growth and high inflation.

Sterling (£1.3156) has dropped to a one-week low outright and against the EUR (€0.8980).

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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