MNI DATA IMPACT: UK Consumer Resilient Despite August Dip>

By Laurie Laird

     LONDON (MNI) - Retail sales fell modestly between July and August, 

defying expectations of no change, but the decline was linked to 

internet promotional activity in July, suggesting the consumer sentiment 

remains resilient despite Brexit-related uncertainty.

     The following are the key points from the August retail sales data 

published Thursday by the Office for National Statistics. 

     - Retail sales fell by 0.2% in August, falling short of the 

Bloomberg median of no change, but the decline stemmed largely from 

internet promotional distortions.

     - Adjusting for a sharp fall in non-store retailing, sales volumes 

actually rose by 0.2% in August, according to an ONS official.

     - Non-store retailing (largely internet-only outlets) slumped by 

3.2% last month, after a 7.6% jump in July, with the gain likely due to 

promotions linked to Amazon Prime Day. However, ONS officials declined 

to specify individual retailers. 

     - The underlying resilience of the British consumer in the face of 

intensifying Brexit uncertainty could bring some relief to Bank of 

England rate setters, although ONS officials confirmed that the Monetary 

Policy Committee would not have seen the August retail data when 

considering interest rates on Wednesday. 

     - Retail sales are likely to contribute positively to Q3 gross 

domestic product. Sales could fall by as much as 1.7% in September and 

leave the sector on level-pegging with Q2. Retail volumes have not 

declined by such a large magnitude in more than six years.     

    - Retail prices declined in August, despite the slump in sterling 

over recent months. The implied deflator slipped to an annual rate of 

0.6%, from +0.8% in July, and has hovered well below 1% since last 

November. 

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com 

[TOPICS: M$B$$$,MABDS$]