UK retail sales remain flat
Figures raise chances of a BoE rate cut later this week
UK retail sales remained flat in January, which could be interpreted as a positive sign as it is a month in which there has usually been a decline. However, there is no growth in the sector expected in the coming quarter.
Sales are poor for the time of year, and are expected to stay below seasonal norms in February, according to the employers’ organisation, the CBI. “Both official data and business surveys are painting a picture of subdued activity for retailers, with little expectation of any improvement soon,” said Anna Leach, CBI deputy chief economist. Retailers are also cutting orders with suppliers as stocks of goods build up.
The CBI’s distributive trends survey shows a mixed bag across retail. While overall sales may have been flat, internet sales picked up and are expected to grow slightly next month.
The news comes just two days before the Bank of England reviews its base rate.
Earlier expectations that it would cut interest rates faded following a recent spree of positive results showing an increase in business confidence, the so-called post-election ‘Boris bounce’. This survey, however, has reduced the odds of a cut as it shows consumers are not as upbeat as businesses.
“2020 looks set to be another tough year for the sector as growth in households’ disposable income is set to remain modest and retailers continue to battle longer-term issues such as digital disruption and the cumulative burden of policy costs,” added Leach.
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