UK retail sales unexpectedly fell the most in 10 months in August as demand for food plunged, reversing a surge the previous month. Food dropped 2.7 percent after increasing that amount the previous month, which was the biggest gain since April 2011.
“While the data is disappointing on the month, the trends in sales continue to look solid,” said David Tinsley, an economist at BNP Paribas SA and a former central bank official. “The release today is probably a useful reminder that the economy’s progress is not going to be a one-way progression to soar-away data.”
The pound extended its decline against the dollar after the report and was trading at $1.6082 as of 9:58 a.m. London time, down 0.4 percent on the day.
Food Sales
Retailers reported that food sales “returned to a more normal level” last month after being boosted by hot weather in July, the ONS said. Excluding food, sales rose 0.4 percent. From a year earlier, total retail sales were up 2.1 percent in August. Sales fell 1 percent from July and increased 2.3 percent from the same month a year ago.
While the outlook for the economy is improving, consumers may remain under pressure as inflation running at 2.7 percent outpaces wages, which grew an annual 1 percent in the three months through July. The BOE said an increase in oil prices may add to upward pressure on inflation in the near term.
The report showed that the annual retail-sales deflator, a measure of changes in shop prices, fell to 1.6 percent in August from July. The deflator on food was 3.4 percent.
“While the data is disappointing on the month, the trends in sales continue to look solid,” said David Tinsley, an economist at BNP Paribas SA and a former central bank official. “The release today is probably a useful reminder that the economy’s progress is not going to be a one-way progression to soar-away data.”
The pound extended its decline against the dollar after the report and was trading at $1.6082 as of 9:58 a.m. London time, down 0.4 percent on the day.
Food Sales
Retailers reported that food sales “returned to a more normal level” last month after being boosted by hot weather in July, the ONS said. Excluding food, sales rose 0.4 percent. From a year earlier, total retail sales were up 2.1 percent in August. Sales fell 1 percent from July and increased 2.3 percent from the same month a year ago.
While the outlook for the economy is improving, consumers may remain under pressure as inflation running at 2.7 percent outpaces wages, which grew an annual 1 percent in the three months through July. The BOE said an increase in oil prices may add to upward pressure on inflation in the near term.
The report showed that the annual retail-sales deflator, a measure of changes in shop prices, fell to 1.6 percent in August from July. The deflator on food was 3.4 percent.
