Trade Desk Thoughts - U.K. BRC Retail Sales Monitor

U.K. BRC Retail Sales Monitor Actual -1.5%, Previous -1.0%

Release Explanation: Retail sales are the measure of the total sales of goods and services by retail stores in the U.K. Retail Sales is an important measure of consumer spending and inflationary pressures. Steady increases in retail sales apply significant inflationary pressures to consumer prices. With Retail Trade being the foremost indicator for consumer spending, this figure is extremely important in understanding the U.K. economy.

Trade Desk Thoughts: U.K. retail sales values fell 1.5 percent from September 2007 when they had risen 3.0 percent. Sales have been lower in the past six out of seven months, the worst since the summer of 2005. As was seen in August, food and drink services were the only sector to show an increase in sales from a year ago. Clothing and footwear remained poor as well as furniture and home wares despite continued discounts and store promotions. Turmoil in the financial markets has hit consumer confidence while increasing the demands on the household budget. Shoppers were on the lookout for value and discounts as they planned their shopping carefully.

Forex Technical Reaction: The sterling has failed to react significantly to this release. The pair is trading just above yesterdays LFB S2 pivot point at 1.7430, which was also the high of the day.

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