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Retail sales in the UK will fall by fastest rate in seven years, as the bites of inflation – business live

Retail sales fell by 1.4% during the first three months of 2017, as buyers were delayed on rising prices. It was the biggest quarterly fall in sales since 2010.

  • UK growth expected to slow to 0.4% in Q1
  • French PMIS: strong growth recorded in April
  • French stocks fall, Euro drops to three-week high as vote looms
  • The Eurozone surveys pointed to stronger growth in the 2nd quarter

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UK retail sales fall at fastest rate in seven years as inflation bites - business live

7.09 am EDT
07:09

The pound fell after weak retail sales data

The pound dropped 0.2% against the dollar at $1.2785 after weaker-than-expected retail sales.

Luqman Otunuga, analyst at foreign exchange broker with fxtm, presents his point of view:

Sterling school has attracted sellers on Friday after the disappointing decline of 1.8% in retail sales in the UK in March, which has revived fears about a British exit from the EU affect the UK economy.

Wage growth lags behind inflation, concerns can continue to enhance the longevity is valued in the UK consumer economic growth. The pound remains covered events in the UK out of the EU, as they continue to move forward and heightened political uncertainty, an extraordinary General election Shocker needs to limit extreme growth.

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6.49 am EDT
06:49

UK growth expected to slow to 0.4% in Q1

Economic growth in the UK slowed to 0.4% in the first quarter from 0.7% in the previous quarter, data released next week are expected.

So say the economists surveyed ahead of the first official picture from the ONS on April 28, Reuters.

Alan Clarke, economist at “Scotiabank”, says risks to its forecast for growth in Q1 was 0.4%, now for the cons.

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6.37 am EDT
06:37

The economic downturn in the UK has already begun, according to a former member of the monetary policy Committee

UK retail sales fall at fastest rate in seven years as inflation bites - business live

Updated
at 6.13 am EDT

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5.41 am EDT
05:41

UK growth ‘slow’ after a weak Q1 retail sales

These poor retail sales (in March, 1.8% and 1.4% in the first quarter) the expected weight on the growth in the UK for the first quarter.

Consumer spending was the main driver of growth after the financial crisis, but these figures indicate a growing unwillingness to spend as much as possible British exit from the EU, associated with the Pressure on household finances starts.

Martin Beck, senior economic adviser to forecasting group, the EY club, says that growth could slow to 0.4% or 0.5% in the first quarter of 2017, 0.7% in the fourth quarter of 2016.

The weakness in March was broad based, with Department stores the only major sector to increase the volume of sales compared to the previous month. Most likely the culprit of this weakness remained a friend – store inflation. It reached 3.3% yoy in March, a pace that did not coincide with March 2012.

With the retail sector is around 5% of GDP, the decline in 1st quarter sales will be shaved close to 0.1 percentage point from GDP growth in this period. Combined with a poor set of economic data from other sectors, growth is likely to have slowed from 0.7% in the 4th quarter of 2016 of approximately 0.4-0.5%.

Looking ahead, the boost to the tradable sector from a weak pound and the recovery of the world economy should mitigate the weakness on the consumer side. But the dominance of the latter in the economy means that the shift in the source of growth is likely to be achieved through a further slowdown in growth.

The ons will publish the first official estimate of first quarter growth on April 28.

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5.29 am EDT
05:29

Richard lim, chief Executive officer of the retail economy, said that the retail industry in Britain faces a “toxic mix” of factors:

This latest data shows that the surge in inflation puts retailers under high pressure from the first quarterly decline in sales at retail in 2013. Families who face rapidly rising living costs for over three years and they curb their spending quickly.

We are concerned about the prospects of the retail trade in the light of a toxic mixture of rising operating costs and sources on the background of weak consumer demand and heightened political and economic uncertainty.

In fact, a recent study of retail Economics found that 43% of consumers believe that they have taken a more cautious spending habits for the last three months with reference to the quarter and month and personal Finance as their main concerns.

In addition, we predict that real earnings will likely start to decline by mid-2017, which will put pressure on the retail industry.

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5.06 am EDT
05:06

Retail sales are falling at the fastest rate in 7 years in the first quarter

In the first quarter overall, retail sales in the UK fell by 1.4%, the biggest quarterly decline since 2010.

It seems that consumers are less willing to spend now that the impact of the weak pound, translating into higher prices at the store.

The pound is currently 14% lower against the dollar than it was the day of the referendum the EU in June. The weak pound makes goods from abroad more expensive.

Kate Davis, senior statistician at the ons, said that prices are rising in all areas:

Today’s retail sales data showed a decline for the month and three months through March, which coincides with the 1 quarter of 2017. This is the first time we have seen quarterly decline since 2013, and it is the consequence of rising prices across a range of sectors.

Howard Archer, chief UK economist at IHS markit, said that retail sales are “terrible”.

Howard Archer
(@HowardArcherUK)

Absolutely dire #UK #retail #sales in March fell by 1.8% m/m Declined by 1.4% yoy In the 1st quarter of 2017 – the worst perforrmance for 7 years ! (1)

21 APR 2017

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4.38 am EDT
04:38

Retail sales in the UK fell in March to 1.8%

Violation: here in the UK, retail sales growth a bit off-putting.

This retail sales fell 1.8% in February-March according to the office for National statistics, much worse than the 0.2% drop forecast by economists.

He was also a big reversal in gold, compared with the previous month, when sales rose 1.7% (this value was revised from 1.4%).

More in the near future.

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4.31 am EDT
04:31

Eurozone PMI figures signal strong start to second quarter

The stronger-than-expected PMIS of France raised the broader Euro zone, contributing to the indicator on the single currency bloc to a New six-year high.

The flash composite PMI from markit Eurozone makes the production and performance of services in the region. This index rose to 56.7 in April from 56.4 and beat the expectations of 56.3.

While growth in France accelerated, it moderated in Germany. The headline composite index for Germany fell to 56.3 in April from 57.1 in March.

Chris Williamson, chief economist at IHS, business markit, said in April PMIS put the Eurozone economy on course to grow by 0.7% in the second quarter:

The Eurozone economy has a strong beginning of the second quarter. In April the index of business activity in the manufacturing works at a level consistent with GDP growth of 0.7%, compared with 0.6% in the first quarter. Such a strong growth, if it continues, will inevitably lead to revisions in the upward direction up to 2017, the forecasts of economists.

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3.51 am EDT
03:51

The Euro fell to three-week high

In the Euro could not hold achieved on Thursday. Yesterday, having hit a three-week high of $1.077, the Euro is now trading at $1.0722.

UK retail sales fall at fastest rate in seven years as inflation bites - business live

Updated
at 3.53 am EDT

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3.36 am EDT
03:36

French stocks fall in early trading

After a sharp rise on Thursday in the French stock – based on predictions about what an independent candidate Emmanuel macron to win the presidential election – investors are more this morning conquered. The CAC 40 down 0.5%.

Here’s how the markets are looking across Europe:

  • The FTSE 100 index: +0.04% 7,121
  • Germany’s DAX: -0.1% 12,021
  • France: -0.5% at 5,053
  • Italian MiB: -0.1% 19,834
  • Spain’s ibex: +0.1% 10,382

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3.19 am EDT
03:19

France: the growth recorded in April

Flash French survey company markit PMI for April easily beat expectations, suggesting growth in the private sector accelerated this month.

UK retail sales fall at fastest rate in seven years as inflation bites - business live

Activity in the manufacturing sector and the service sector came in better-than-expected increase in the consolidated index to 57.4 in April from 56,8, where anything above 50 indicates growth.

It was much better than 56.2 predicted by economists in a Reuters poll, and suggests the French economy is gaining momentum on the eve of elections.

Alex Gill, chief economist at IHS markit, said that the French company had shrugged off uncertainty caused by the election:

The figures confirm that the French private sector remained resilient to political uncertainty surrounding the upcoming presidential elections.

However, business optimism hit multi-year high in April, the number of respondents expecting a favourable business environment after its completion. This, in turn, encouraged firms to take on additional staff.”

Updated
at 3.22 am EDT

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3.05 am EDT
03:05

From the guardian’s Martin kettle:

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2.53 am EDT
02:53

Traders on the spread firm IG expect that European markets will open higher this morning:

IGSquawk
(@IGSquawk)

Our European opening calls:$FTSE 7131 +0.18%
$12055 DAX +0.23%
$CAC 5088 +0.20%$CAPRICORN 10391 +0.18%$19858 IIB +0.04%

21 APR 2017

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2.52 am EDT
02:52

Agenda: France in focus as elections approach

Good morning, and welcome to our rolling coverage of the world economy, financial markets, the Eurozone and business.

The minds of investors will focus on France, how to prepare votes to vote in the first round of presidential elections on Sunday.

The election result is expected to be far-reaching consequences, not only dictating domestic policy in France but also potentially the future of the EU.

Michael Hewson, chief market analyst at CMC for the UK markets, on how markets can digest the result.

With all eyes on the first round of the French presidential elections this weekend in France, the CAC 40 index has exceeded yesterday, the markets started to lay in the prospect of an independent candidate Emmanuel macron on the second round against marine Le Pen or, perhaps, Jean-Luc Mélenchon, who in the late surge in the polls.

If it will be enough to get him in the second round debatable, but the markets begin to price in the prospect that the Makron is likely to win the contest between the other two candidates.

Let’s hope that it is not squeezed out, especially in light of yesterday’s terrorist attack in Paris, which gave the tightness of the election can affect the course of events, leaving investors facing the confrontation between marine Le Pen on the right and Jean-Luc Mélenchon on the left. Any such result is unlikely to be well received by the market.

Also coming today…

The PMI surveys for April will give the earliest indication of how the manufacturing and services sectors in France, Germany and the Eurozone were at the beginning of the second quarter.

Here in the UK, retail sales data for March will make it clear how much consumers were willing to splash out on new purchases, despite rising prices.

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