UK Retail Sales Tumbled by 2.3% in April Due to Bad Weather

Bob Mason
Updated: Jun 2, 2024, 10:20 GMT+00:00

Key Points:

  • UK retail sales tumbled 2.3% in April after declining by 0.2% in March.
  • Retail sales were down 2.7% year-on-year in April.
  • Later in the Friday session, FOMC member commentary, US durable goods orders, and Michigan Consumer Sentiment numbers.
UK Retail Sales

In this article:

UK Retail Sales Report – April 2024

On Friday (May 24), the UK economy was in the spotlight, with UK retail sales drawing investor attention.

UK retail sales tumbled by 2.3% in April after falling by 0.2% in March. Economists forecast retail sales to fall by 0.4%. Furthermore, retail sales ex-fuel slid by 2.0% after declining by 0.6% in March. Economists expected retail sales ex-fuel to decline by 0.6%.

According to the Office for National Statistics,

  • Non-food store sales declined by 4.1% in April 2024, the joint largest decline since January 2021.
  • Automotive fuel sales had the most marked decline since October 2021.
  • Department store sales declined by 0.8%.
  • Food store sales volumes fell by 1.9% in April.
  • Non-store retailing dropped by 0.9%.

Retail sales volumes increased by 0.7% in the three months leading up to April compared to the previous three months. Year-on-year, retail sales were down 2.7%.

Retailers attributed the marked decline in retail sales to bad weather.

Bank of England Monetary Policy Implications

The retail sales figures for April could fuel investor bets on a summer Bank of England rate cut. Downward trends in consumer spending could dampen demand-driven inflation and allow the BoE to consider cutting interest rates.

On Monday (May 20), Bank of England Monetary Policy Committee member Ben Broadbent said the BoE could cut rates in the summer. However, hotter-than-expected UK inflation numbers created uncertainty about a summer move before the retail sales data.

GBP/USD Reaction to the UK Retail Sales Numbers

Before the April UK retail sales figures, the GBP/USD rose to a high of $1.26994 before falling to a low of $1.26869.

However, in response to the retail sales data, the GBP/USD slid to a low of $1.26741 before rising to a high of $1.26928.

On Friday (May 24), the GBP/USD was down 0.06% to $1.26911.

GBP/USD reaction to the UK retail sales numbers.
240524 GBPUSD 3 Minute Chart

Up Next

Later in the Friday session, the US economic calendar warrants investor attention. FOMC member commentary and Michigan Consumer Sentiment numbers could influence investor sentiment toward the Fed rate path.

According to preliminary numbers, the Michigan Consumer Sentiment Index fell from 77.2 to 67.5 in May. Furthermore, the Michigan Inflation Expectations Index increased from 3.2% to 3.5%.

Revisions to the Michigan numbers will likely impact investor expectations of a September Fed rate cut.

Other stats include durable and core durable goods orders. Economists forecast core durable goods orders to increase by 0.1% in April after rising by 0.2% in March.

However, investors should monitor FOMC member chatter. FOMC member Christopher Waller is on the calendar to speak. Reaction to the US S&P Global Services PMI and views on the timing of a Fed rate cut would need consideration.

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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