Pound jumps after UK retail sales trounce forecasts
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The mighty British shopper strikes again.
The pound has popped higher (+0.34 per cent on the day at $1.2525) after new data from the Office for National Statistics suggested the UK consumer can’t be beaten quite as easily as some have feared.
Sales jumped by 3.7 per cent in February, compared to the same month last year, and by 1.4 per cent from January. Analysts polled by Bloomberg had expected to see a more modest 2.6 per cent rise on the year, and 0.4 on the month. That said, January’s figures were revised lower.
Online sales were up by a thumping 20.7 per cent on the year.
But watch the rolling three-month average.
Kate Davies, ONS Senior Statistician said:
February’s retail sales figures show fairly strong growth, though the underlying three-month picture shows falling sales as February’s figures follow two consecutive months of decline in December and January.
Some investors are reluctant to sound the all clear. Julien Lafargue, European equities strategist at JP Morgan Private Bank writes:
The UK economy has been surprisingly resilient in the past 6 months. However some cracks have started to appear recently. Today’s numbers should reassure the market as, despite rising inflationary pressures, the UK consumer started to spend again. However, we would expect real wage growth to remain anaemic as the country embarks in a two-year journey towards Brexit. As such, over the medium term we remain cautious on the consumer sector.
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