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UK Retail Sales Stagnate in February after 3.6% Surge in January

By:
Bob Mason
Published: Mar 22, 2024, 07:20 GMT+00:00

Key Points:

  • UK retail sales stalled in February after surging 3.6% in January.
  • Retail sales were down 1.3% from pre-pandemic levels.
  • Next up, Fed Chair Powell and voting FOMC member speeches.
UK Retail Sales

In this article:

UK Retail Sales Report – February 2024

The UK economy was in focus after the Bank of England interest rate decision. UK retail sales were flat month-on-month in February after surging 3.6% in January. Economists forecast retail sales to decline by 0.3% in February.

According to the Office for National Statistics,

  • Non-food store sales increased by 0.7% but were down 0.5% over the year.
  • Clothing store sales rose by 1.7% month-on-month in February, driving non-food store sales higher.
  • Department and other non-food store sales increased by 1.6% and 0.4%, respectively.
  • However, food store sales volumes declined by 0.3% in February.
  • Automotive fuel sales were down 1.3% month-on-month.

Retail sales volumes were down 0.4% in the three months to February compared with the previous three months.

Retail sales were down 0.4% year-on-year in February and remained 1.3% below pre-pandemic levels (February 2020).

Bank of England Monetary Policy Implications

The pullback in retail sales supported the Bank of England outlook on interest rates and monetary policy.

On Thursday, the dynamics of the Monetary Policy Committee Meeting turned sharply dovish. The MPC voted 8-1 for holding interest rates at 5.25%. One MPC member voted for an interest rate cut. In the previous meeting, two MPC members voted for a rate hike in a 7-2 vote to leave interest rates at 5.25%.

Weaker consumer spending could dampen demand-driven inflation and fuel BoE discussions about an interest rate cut.

GBP/USD Reaction to the UK Retail Sales Numbers

Before the UK retail sales figures, the GBP/USD rose to a high of $1.26750 before falling to a low of $1.26234.

However, in response to the retail sales data, the GBP/USD fell to a low of $1.26197 before steadying.

On Friday, the GBP/USD was down 0.24% to $1.26268.

GBP/USD shows mixed reaction to UK Retail Sales Report.
220324 GBPUSD 3 Minute Chart

Up Next: Fed Chair Powell and Voting FOMC Member Speeches

On Friday, Fed Chair Powell and FOMC voting members Michael Barr, Michelle Bowman, and Philip Jefferson are on the calendar to speak.

Views on inflation, the economic outlook, and the timeline for a Fed rate cut warrant investor attention.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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