UK’s Office For National Statistics announces a sharp decline in retail sales in November

on Dec 19, 2019
Updated: Mar 11, 2020
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  • UK's Office for National Statistics announces a sharp decline in retail sales in November.
  • Retail sales highlighted at -0.6% in November versus the analysts' estimate of 0.3%.
  • Late Black Friday, Brexit, and General Election cited as the reasons for poor retail sales report.
  • GBP/USD dropped to 1.3085 level from 1.3125 following the retail sales report.

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The United Kingdom’s Office for National Statistics announced the monthly retail sales report on Thursday. While it came out significantly lower than the analysts’ forecast, the response in the forex market wasn’t too aggressive.

According to the report, in the past three months that ended in November 2019, the UK saw a drop of 0.4% in retail sales as compared to the figure for three months that came before this period. The report also highlighted that the decline in November’s retail report marks the first time since April 2018.

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Retail Sales Dropped By 0.6% In November

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In November alone, the report added, retail sales saw an even steeper decline of 0.6% as compared to the figure for October. In November’s report, household goods were the only items to have noted growth.

In terms of year over year growth, the United Kingdom saw a narrow increase of 1.0% as per the November’s report. The gain, however, was reported to be the smallest since April 2018. A 1.1% drop in the growth of non-food stores contributed the most in keeping the gains under pressure, as per the analysts.

Another prominent reason quoted for the poor retail sales report in November was the late Black Friday in 2019. The monthly report covers sales from October 27th to November 23rd. Since the Black Friday came on November 29th this year, its impact on the retail sales is likely to be witnessed in the December’s report, as per the financial experts.

It was also accentuated in the report that the online sales contributed lesser to the retail sales report in November 2019 as compared to the report for last month. November’s report posted the online sales at 18.7% of the total while the figure was printed slightly higher at 19.1% in October.

Brexit And Election Driven Uncertainty May Have Contributed To Weighing On The Retail Sales

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On a macroeconomic level, analysts also suggested that the events of Brexit and the UK’s general election that stirred uncertainty in the financial markets in the past month must have weighed the retail figure further down.

GBP/USD started the day around 1.3080 on Thursday. Having hiked to around 1.3125 in the early session, the pair dropped back to 1.3085 following the negativity of the monthly retail report. The Bank of England’s announcement regarding the bank rates was expected to stir the next major movement in Sterling. Following the monetary policy summary weighing heavily on the Pound, GBP/USD has dropped further to 1.3024 level.

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