UK Analysis: Sept Retail Sales Fall; To Lift Q3 GDP Modestly>

-UK September total sales -0.8% m/m, +1.2% y/y

-UK Q3 Retail +0.6% Q/Q; Set to contribute 0.03 percentage points to GDP 

-UK September retail prices +3.3% y/y, highest since March of 2012

     By Laurie Laird and Jamie Satchithanantham 

     LONDON (MNI) - Retail activity retreated in September, as prices 

accelerated at their fastest pace in over five years, but the sector 

will still add modestly to gross domestic product in the third quarter. 

     Sales volumes fell by 0.8% between August and September, much worse 

than the median MNI median forecast of 0.3% decline. On an annual basis, 

retail sales increased by 1.2%, below the MNI median of a 2.0% 

improvement. 

     The implied price deflator rose by 3.3% in the year to September, 

the eleventh straight increase, and the biggest jump since a 3.4% surge 

in March of 2012. 

     Sales of the so-called Other Stores category, which comprise 13% of 

total volumes, plunged by 6.7% in August, with weakness noted in a range 

of specialty vendors, such as opticians, souvenir shops and weapons 

sellers. 

     August sales were weaker than originally reported, rising by a 

revised 0.9% from June and by 2.3% over July of 2016, compared to the 

initial estimate of up 1.0% on the month, and an annual gain of 2.4%. 

     That still takes third quarter sales 0.6% above the level of the 

third quarter, leaving the sector poised to add 0.03 percentage points 

to gross domestic product. Retail sales comprise 5.4 percent of GDP 

after the latest revisions to the national accounts, down from 5.6% 

previously. 

     Excluding fuel, sales declined by 0.7% last month, rising by 1.6% 

compared with September of 2016, below the MNI median forecast of a 0.1% 

monthly gain and a 2.6% annual improvement. 

     August non-fuel sales were also weaker than originally reported, 

rising by a revised 0.9% from July and by 2.6% over August of 2016. 

Excluding fuel, sales growth was originally reported as up 1.0% in 

August, and 2.8% above the same month of 2016. 

     Fuel prices accounted for much of the rise in retail inflation, but 

excluding fuel, the implied deflator still jumped by 3.0%, also the 

biggest increase since March of 2012. 

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

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