(Reuters) - Retail sales volumes fell last month for the first time since January, a sign that consumer demand may be slipping ahead of planned government spending cuts. The Office for National Statistics said sales volumes fell 0.5 percent in August, surprising analysts who had forecast a modest increase and backtracking after several months of resilient growth. On the year, retail sales volumes rose just 0.4 percent -- only a fifth of the 2.0 percent that analysts had forecast. Sterling hit session lows against the euro and the dollar after the report, which also showed hefty downward revisions to July's figures. "August's fall in retail sales could be the first sign that the surprising resilience of consumer spending could be coming to an end," said Vicky Redwood at Capital Economics. "The pressures on consumers are clearly mounting." Although results of retailers have generally started to improve following the recession, many experts think the sector faces a harsh winter as the government cuts spending and raises taxes to rein in a record public deficit. Bellwether retailer John Lewis said trading conditions would likely get tougher as tax hikes and public spending cuts hit shoppers, as it reported a 28 percent rise in first-half profit. Kingfisher, Europe's biggest home improvement retailer, beat first-half profit forecasts, helped by cost-cutting and business improvements. But it too saw tougher times ahead. http://uk.reuters.com/article/idUKTRE68F1A220100916 Hum, GBP/USD down lousy 0.17 %, FTSE down lousy 0.08 %. Where are good, old days when there were 1-2 % down moves on such news ????
Yea, UK is hurting bad. Their Socialistic policy and Tax and more tax and more tax on their citizens will continue to destroy the purchase power of every Brit. It is a sad state of affairs as I love London. V for Vendetta is the next move for the UK. BIG GOVERMENT does not work. They need a "Policy" revolution as much as the US does.
And the pound has just recovered all the losses. Looks like a bullish divergence, at least for the short-term IMO, probably off the back of all this dollar weakness over QE. The thing is, £ has QE issues as well - but the market is ignoring that for now. IMO it might run up back to the 1.60 recent highs over the next week or two. Bit of a risky trade as the Uk could have bad data at any time, but I wouldn't be short for now. Gold is probably a better way to play near-term dollar weakness.
The current government is dominated by a right-wing party and is doing some of the more determined austerity measures and public spending cuts in the developed world, so much so that public unions are starting to mutter about strikes. You can hardly call that socialist.