UK RETAIL SALES MUCH LOWER THAN EXPECTED IN JANUARY
Today, UK core retail sales for January came muted at 0.1% vs. estimate 0.6% ; prior: -1.5% (MOM); On YOY basis, core retail sales came at 1.5% vs. estimate 2.5%; prior: 1.3%.
Overall, today’s muted UK retail sales may be pointing to a subdued consumer spending as a result of tepid wage growth. But muted retail sales for January may be a seasonal factor also on account of December holidays and seasonally sales.
In any way, a fatal combination of muted consumer spending (retail sales) and higher imported inflation may be also signaling stagflation in the UK economy. Thus, BOE may be forced to stay on the sideline despite a hawkish hold stance a few days ago.