Retail Sales show nothing short of a UK spending spree
22nd October 2015 By: Ranko Berich
UK Retail Sales – 22/10/15
Increases in real wages and sustained falls in retail prices appear to have been a powerful tonic UK consumers: September’s retail sales data has shown nothing short of a spending spree.
This was not just a case of the Rugby World Cup boosting sales, although anecdotal reports suggest this may have been a factor for food sales. Sector data shows that the increase was broad based, and World Cup tourists hardly could have contributed to the impressive increase seen in household goods.
This report is not just good news for the economy, it has some important implications for inflation and monetary policy. While retail prices have been falling for 15 months, an indication that consumers have loosened their purse strings could see retail prices rise. If this proves to be the case, the UK could finally see the glimmer of inflation that the Bank of England has been looking for, leading to rate hikes and further sterling strength.