UK Economy Shows No Signs of Bottoming Out As Retail Sales Decline Again
GBP/USD turned bearish in July but after a month of consolidation in October, it has been displaying some strong bullish reversing indicators this month, making higher highs and higher lows. Although the British economy continues to deteriorate which should continue to weigh in the Pound.
Attempts to reverse the trend have failed at moving averages, with the most recent attempt ending at the 100 SMA (green) earlier this week, after the surge following the softer US CPI inflation report, which sent the USD tumbling around 200 pips lower. This currency pair was negative for several months until nearly reaching 1.20 at the beginning of October, while this month buyers are seeking to take control of this pair, despite encountering several roadblocks along the way.
On Friday retail sales were expected to turn positive in the UK, but they declined once again, indicating that the UK consumer is not feeling well. According to official statistics released on Friday by the Office for National Statistics (ONS), UK retail sales declined 0.3% month on month in October, compared to 0.3% projected and -1.1% in September. Core Retail Sales, excluding vehicle motor fuel sales, down 0.1% MoM, compared to 0.4% projected and -1.3% predicted in September. Annual Retail Sales in the United Kingdom fell 2.7% in October, compared to -1.5% predicted and a 1.0% loss in September, while Core Retail Sales down 2.4% in the reported month, compared to -1.5% projected and -1.5% before.
Retail Sales Released by ONS – 17 November 2023
- UK October retail sales MoM -0.3% vs +0.3% expected
- September akes were -0.9%; revised to -1.1%
- Retail sales -2.7% vs -1.5% y/y expected
- Prior -1.0%; revised to -1.3%
- Retail sales (ex-autos, fuel) -0.1% vs +0.4% m/m expected
- Prior sales ex-autos-1.0%; revised to -1.3%
- Retail sales (ex-autos, fuel) -2.4% vs -1.5% y/y expected
- Prior -1.2%; revised to -1.5%
It is yet another month with a substantial shortfall in retail sales, reflecting the UK consumer’s weakness this year. since consumer activity deteriorates, the BOE will be less at ease, since they may not be allowed much leeway to tighten policy further if necessary.
GBP/USD Live Chart
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