February 19, 2021
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UK: retail pain triples in lockdown 3

  • UK retail sales fell by more than three times what the consensus expected in Jan-21, with the -8.8% m-o-m outcome also triple the pain of the Nov-20 lockdown. Food sales started too high to rally further, while the non-food crash was about 50% of lockdown 1.
  • This disappointment is likely to continue the downwards trend in GDP forecasts. That doesn’t matter to Sterling’s vaccination-fuelled up-trend, but while markets hope it will allow the UK to unlock quicker, EA and SE activity has just gone ahead and increased.

February 12, 2021
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UK: GDP recovery miscounts private pain

  • GDP growth beat expectations with a 1.2% recovery in December ahead of the stricter lockdown set to hit activity in January. The proportion of businesses trading implies a fall of about 4% in Q1, which would be consistent with the BoE’s downgraded view.
  • The trend decline in business responses to the surveys has now extended to a change on the year worth 6.1% of turnover. The ONS assumes respondents are representative, but private-sector pain of non-respondents could be a recession-sized hole in the recovery.

December 18, 2020
UK: retail reverses gains since June_image

UK: retail reverses gains since June

  • UK retail sales were broadly battered by the second national lockdown in November, with a 3.8% m-o-m headline decline. High demand at food stores and weakness in clothing and fuel was unsurprising, but non-store sales failed to capitalise further.
  • The sector has reversed its recent gains by returning to the level from between June and July. A repeat of March’s GDP elasticity or a similar overall reversal would be less bleak than I previously assumed, but remains recessionary over the winter.