Latest data released by ONS - 19 July 2018
- Prior +1.3%; revised to +1.4%
- Retail sales +2.9% vs +3.5% y/y expected
- Prior +3.9%; revised to +4.1%
- Retail sales (ex autos, fuel) -0.6% vs +0.1% m/m expected
- Prior +1.3%; revised to +1.4%
- Retail sales (ex autos, fuel) +3.0% vs +3.7% y/y expected
- Prior +4.4%; revised to +4.5%
Misses across the board and sterling sinks, as cable takes out bids and barrier options at 1.3000. GBP/USD falls to a low of 1.2987.
Relative to expectations, the results here are softer, but it isn't all bad really. You have to consider that for May's reading there was the Royal Wedding which is a one-off bump - and there is slightly higher revisions there as well. But looking at the details, Q2 retail sales comes in at +2.1% q/q and that's the strongest calendar quarter growth since Q1 2004.
Given the context of the quarter itself, I don't believe the right move should be lower or at least I don't think sterling should fall by any more than it should. Further details show that warm weather boosted food and drinks sales, while non-food sales were hurt by the World Cup (another one-off event).
ONS says that retail sales in Q2 is likely to contribute +0.1% to the Q2 GDP growth rate.
