GBP: monthly figures good, but annual figures make for stark viewing

The UK retail sales were released yesterday and made for some interesting viewing. Month-on-month, October’s increase of 0.3% was better than forecasted and this helped the pound’s performance throughout the day. However, year-on-year, there was a 0.3% drop which, while better than the 0.6% slump predicted, still shows the effects of the British public feeling the pinch.

Clothing sales fell by 1.5% over the course of October, which is a clear indication that British consumers are spending less as inflation continues to outpace wage growth. Having said that, there was talk of the milder weather stopping people from purchasing clothing traditionally thought of as being more appropriate for the winter months.

There are no major releases from the UK today, so market movements are likely to be driven by yesterday’s events, events from elsewhere today, or any political developments that rear their head.