MNI DATA IMPACT: Weak UK Retail Sales to Weigh On Q4 GDP>

By Laurie Laird and Irene Prihoda

     LONDON (MNI) - UK retail sales fell unexpectedly in December,

suggesting that previously-resilient consumers lost their nerve in the 

closing months of 2019.

     The following are the key points from December retail sales data 

published Friday by the Office for National Statistics.

     - Retail sales contracted by 1.0% in the fourth quarter, the 

biggest quarterly decline since the first quarter of 2017, leaving the 

sector poised to subtract 0.05 percentage points from Q4 GDP.  

     - The disappointing data will only raise expectations that the Bank 

of England could reduce interest rates later this month. Retail activity 

comprises just 5.4% of GDP, but accounts for approximately one-fifth of 

total consumption, which has provided one of the few catalysts of 

economic growth over the past two quarters.   

     - Sales volumes slumped by 0.6% in December, confounding 

expectations of moderate growth, extending a downwardly-revised 0.8% 

decline in November.  

     - Retail sales have failed to grow for five consecutive months, the 

longest stretch of weakness since comparable records began in 1996.  

     - Automotive fuel sales rose by 1.6% in December and by 0.3% in 

the fourth quarter, providing the biggest upward influence on total 

sales. Excluding fuel, sales declined by 0.8% in December and by 1.1% 

in Q4, the largest fall in a calendar quarter since March of 2010. 

     - Internet sales provided the only real bright spot in the December 

data, rising by 5.6%, rebounding from the record-low increase of 1.9% in 

November. That lifted internet sales to 19.0% of total transactions from 

18.6% in November.  

     - Retail price pressures remain subdued, with the implied deflator 

rising by an annual rate of 0.3% in December, matching the November 

outturn. 

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

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