UK retail sales drop 0.4% in September, well below forecasts
UK retail sales fell 0.4% month-on-month in September, missing expectations for a 0.1% decline, after a revised 0.7% rise in August, the Office for National Statistics (ONS) reported. GBP/USD edged lower on the data.
Core retail sales, which exclude auto fuel, fell 0.7% on the month, compared with forecasts of a 0.1% drop and a revised 0.9% gain in August.
On an annual basis, headline retail sales grew 0.8%, down sharply from a revised 2.7% rise in the prior month and short of the 1.0% expected. Annual core sales also rose 0.8%, well below August’s revised 2.9% increase and the 1.5% consensus.
The data points to a notable slowdown in UK consumer spending after a stronger-than-first-reported August. The ONS figures showed broad-based downward revisions to the prior month’s readings alongside the weaker September numbers.
The British pound slipped modestly following the release. GBP/USD traded down 0.09% on the day at 1.3388.
Why it matters for markets: Weaker-than-expected consumer spending data can weigh on growth expectations for the UK economy, which in turn affects interest-rate expectations for the Bank of England (BoE) and the direction of the pound. Softer retail figures tend to support the case for a looser BoE policy stance, a factor GBP/USD and UK gilts traders watch closely.
Source: FXStreet