UK: Shopping spending spree – ING

By FXStreet James Smith, Economist at ING, suggests that after a very disappointing set of retail sales data last month, UK spending rebounded in earnest during April – although the volatility in this data over the past few months warrants caution.

Key Quotes

“Retail sales rebounded across the board in April, with the ex-auto fuel measure increasing by 1.5% MoM (after an upwardly revised -0.7% figure in March), led by strong sales in most categories. This is at odds with recent readings from the GfK consumer confidence survey, which suggests that consumers are becoming less optimistic on the economic spending over the next year, perhaps in response to the forthcoming EU referendum. But this retail sales data firmly supports the notion that, although at the margin spending may be affected by referendum-related uncertainty, the backdrop of a tight labour market and rising real wages are likely to continue supporting spending in the near-term.

That said, it is worth noting though that this series has been very volatile, in particular since last year’s Rugby World Cup (hosted in the UK), which suggests that the large drop last month and subsequent rebound this month could be as much to do with statistical factors as economic …read more

Source:: FX Street