Here’s something for Adam Posen and all those in favour of further quantitative easing to chew on; UK retail sales have fallen for a second month in a row according to the Office of National Statistics:
Between August and September total sales volume decreased by 0.2 per cent. Predominantly food and non-food stores both increased by 0.1 per cent. Within predominantly non-food stores there were rises across all sectors apart from textile, clothing and footwear stores which fell by 0.8 per cent. The largest rise was other stores at 0.7 per cent. Non-store retailing decreased by 0.5 per cent.
Added to weak mortgage lending figures, recent downbeat comments from the Home Builders Federation, this data is likely to reinforce the view that the economic recovery has peaked.
Here’s Unicredit’s take on the retail sales figures:
Even after today’s weak outcome, the pace of expansion of retail sales, albeit easing somewhat compared to the strong performance recorded in 2Q, remained relatively sound (+1.1% qoq). This is consistent with our view that private consumption growth will remain positive in 3Q. However, the fact that retail sales recorded the second decline in a row suggests that momentum is easing. Given that a strong turnaround in coming months is unlikely, we see risks that households’ consumption in Q4 might be weaker than we are currently penciling in.
Just the moment then to announce £81bn of public spending cuts.
More QE anyone?
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Meanwhile, over in the currency markets, the Great British Krona is off its early highs but still comfortably above Wednesday’s levels.
Related Link:
On to Plan B already, George? – FT Alphaville