UK Retail Sales Slip Despite Olympic and Football Fever
THE TAKEAWAY: UK retail sales drop 0.3% in August -> Football shirts and Olympic wear drive up sales -> Sterling trading lower today
UK retail sales (excluding auto fuel) fell for the first time in four months. Sales were down 0.3% in August, as expected, compared to last month’s stable level of retail sales. Retail sales were 3.1% higher than August 2011, according to the UK office for National Statistics. Including auto-fuel, retail sales were only 0.2% lower in August.
Food stores saw a 0.2% increase in sales in August. In the non-food sector, sales of sporting goods and toys were particularly good. Apparently, sales of football shirts and Olympic related apparel contributed to the increase in sporting goods sales.
The UK has suffered three consecutive quarters of negative GDP, and Sterling investors are looking for signs of a recovery to give a boost to the currency. However, the lower retail sales indicate that consumption is still down and will not help the economy.
The British Pound briefly rallied following the slightly better than expected auto-fuel sales, GBPUSD touched 1.6200, before falling back to its original position. GBPUSD fell below the key 1.6200 level earlier in today’s session; the level could now provide resistance. Support could now be provided by a year-long downward trend line, currently sitting at 1.6118.
GBPUSD 15-minute: September 20, 2012
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