UK: Crack in consumer spending as retail sales disappoints - ANZ

Research Team at ANZ notes that the UK’s January retail sales data were disappointing, with sales falling for the third month in a row.

Key Quotes

“Ex-auto fuel sales dropped 0.2% m/m following a revised 2.2% m/m drop in December. Sales at household goods stores fell 0.6% and non-store retailing was down 4.1%. Over the past six months sales have been flat. The notion of a booming consumer (a source of strength) is fading and as inflation picks up, that will erode consumer’s purchasing power (particularly given slow wage growth). One of BOE Governor Carney’s key judgments (and reasons for keeping rates low) was that consumers will falter, and so far that looks to be panning out.”