UK Retail Sales – Now Comes the Real Data for UK
Earnings and inflation look great for the UK, but the real economy is not doing so well and retail sales will show that today
The economic data has shown that the UK economy has made a reversal. During Q1, the economy was performing surprisingly well as the data showed, but that was due two 2 factors; first, the global economy rebounded softly after weakening for most of last year, and second, British firms were stocking up ahead of a no-deal Brexit scenario.
But, that lasted as long as it did and the economy now looks to be in a really difficult shape. Construction, manufacturing activity, industrial production and services have fallen into contraction. Although, employment is fine as jobs keep growing, the unemployment rate is at 3.8%, inflation is holding up well at around 2%, while earnings are also increasing at a great speed.
But, these aspects of the economy will get affected negatively if the other sectors remain in contraction. This week we saw some decent figures from the UK but that came from the second group of data. Today we will have an important piece of data from the first group.
Retail sales turned negative in April after the revision to -0.1% last month, while May posted a 0.5% decline. Today, retail sales are expected to show a 0.3% decline for June, which would be the third in a row and would confirm that the British consumer is in a difficult spot, despite the increase in earnings – who knows in whose pockets they end up. So, another decline today would be negative for the GBP since it would show that the average Brit is not doing as well as earnings suggest.
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