U.K. Retail Sales Slip For The First Time In Six Months, Despite Of Recovery Signs

Daily Forex Fundamentals | Written by ecPulse.com | Dec 17 09 11:02 GMT |

Notwithstanding the remarkable improvement witnessed in the United Kingdom since the second quarter of the current year, retail sales slumped in November after rising for two consecutive months. Retail sales plunged to -0.3% in November from the revised 0.6%, bellow estimates of 0.5%. The reading retreated after touching the highest level in 17 months in October, when it was boosted by the clothing amid Halloween and schools. Sales are expected to incline, as we near to Christmas and New Year holidays. In addition, recovery signs emerging from the second largest economy in the Europe are suggesting that the slump is over. In November, the fall came mostly from sales at non-food stores which dropped 0.9% on the month. Sales at department stores plummeted 4.4% on the month, the strongest slump since 1988. Volumes of textile sales, clothing and footwear dwindled 1.8% from October, the sharpest fall since May. Although the economy mitigated the pace of contraction in the third quarter to 0.3%, relative to 0.6% and 2.4% contractions witnessed in the second and third quarters respectively and unemployment slowed down in the last three months, retailers are still suffering. The unemployment rate inched up at its slowest pace since 2008 to 7.9% in the three months ending October from 7.8% in September and August. Jobless claims benefits retreated by 6,300 in November to 1.63 million, while the claimant rate lingered at 5%. Average earnings including bonuses increased to 1.5% from 1.4% and the reading excluding bonuses was unchanged at 1.7%. Currently, companies are shedding fewer employees as they return to profitability again amid the turnaround and recovery in global demand, which is spurring retailers' sales as households have higher purchasing power. However, the rate is still considered high and threatening. On the year, retail sales declined to 3.1% from the revised of 3.7%, bellow median estimates of 3.7%. After the news; the pound slipped to a low of 1.6145 after reaching a high of 1.6339 earlier today, while in stock markets FTSE sagged 19.97 points or 0.38% to 5300.29 at 09:29 GMT. It is worth noting that MPC members kept the borrowing cost at its low level of 0.5% and the APF program at 200 billion pounds in December, as the economy improves and inflation rose in November near the lower boundary of 2% set by the bank. Analysts expect the economy to leave recession in the fourth quarter, as it currently gathers strength. The Bank of England anticipates the economy Britain will return to growth in the last quarter. The economy is expected to expand 2.2% next year and 4.1% in 2011, according to policy makers’ projections announced in November. Ecpulse disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers' opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk