UK: Retail sales likely to have picked up by 0.6% in January - Rabobank

Analysts at Rabobank suggest that today’s flow of macro-economic data starts with UK retail sales for January and after a set of depressingly weak figures in December, which were a reflection of the post-Black Friday lull but also of the lack of historical data to make proper seasonal adjustments for such an event, it is expected that retail sales (excl. auto fuel) will have picked up by 0.6% in January.

Key Quotes

“This would leave the annual rate at 2.4%, more than a full point higher than December but also more than a full point lower than the pre-Brexit trend. However, given the somewhat distorted backdrop of the December data, there’s quite some uncertainty to this consensus view. The consumer environment remains pretty tough, something that was also highlighted in the Bank’s Inflation Report. The squeeze in real incomes and the continued uncertainty regarding the implications of Brexit is hurting consumer confidence, which has picked up slightly in January but is still at a relatively low -9. In addition, it is worth pointing out that the 2.4% rise in retail sales volumes would be somewhat at odds with the figures compiled by Visa, which noted in a report earlier this week that overall UK consumer spending dropped in January for the first time in five years.”