Forex News: UK Retail Sales Drop at Start of Q4
THE TAKEAWAY: UK retail sales drop 0.7% in October, sharpest decline in 6-months -> Consumers spend less at start of Q4 -> Sterling trading steady
UK retail sales declined at the sharpest rate in 6 months according to the UK Office of National Statistics. Retail sales (excluding auto fuel) in October were reported at -0.7% versus an expected 0.1% decline, and lower than September’s revised 0.5% rise in retail sales. Retail sales in October were 1.1% higher than October 2011.
The average weekly spending on UK retail sales in October was 6.8 billion Pounds, compared with 6.6 billion in September. Internet sales were 0.5% higher in October.
Just yesterday, the Bank of England inflation report said they expect the UK economy to continue to experience pressure from the Euro debt crisis and predicted a possible decline in Q4 GDP. This economic release indicates a drop in consumer spending during the first month of Q4.
Although the results were worse than expected, Sterling did not sustain any losses in currency markets, possibly experiencing a pickup from a simultaneous rise in Euro. GBPUSD is currently trading slightly below 1.5850 after setting a new 2-month low at 1.5822 earlier in the session. Support might be provided now by the key 1.5800 figure.
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