UK DATA: Sep Retail Sales inc. fuel -0.2% m/m; +0.5% y/y
–Sep retail sales ex fuel unch. m/m; +1.8% y/y
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Retail sales volumes fell for the 2nd consecutive month in Sep the first
back to back fall since Jan and below the median forecast for a rise of
0.3% m/m. Ex auto fuel sales were flat, a little below the median for a
0.1% m/m rise. The detail showed non-food and food sales both up 0.1%
m/m with clothing and footwear responsible for the weakness of the
report, falling 0.8% m/m. The clothing deflator rose to 1.4%, the first
positive result since June 1998 showing prices on the High Street rising
probably due to the increased cost of raw materials and possibly stores
raising prices ahead of the VAT hike in Jan. The overall retail sales
deflator ex fuel rose to 1.6% from 0.7%, the highest since Jan. Overall,
these figures will boost expectations that the BOE could extend QE in
response to slowing growth in November.