Retail sales in the UK in March tell the story of what is happening in the UK economy:
From the spring of 2021 onwards, the trend in retail sales has been downward.
This is a country heading for a recession. And as other data this morning shows, things are going to get much worse.
I will; have more on that soon.
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Did you read the bit which said:
“Automotive fuel sales volumes fell by 3.8% in March 2022 with other data sources indicating that some non-essential road travel had been reduced following record high petrol and diesel prices.”
Prices doing what they are supposed to do.
Yes, higher prices are squeezing consumption. But a 3.8% drop in volume still means more money is being spent on fuel (because prices are up more than 3.8%)…… and higher gas and electricity prices have not really kicked in, yet – although people may well be tightening their belts in anticipation of what lies ahead.
The bottom line is that discretionary spending has taken a kick in the teeth… and in FX markets GBPUSD had dropped more than 1 cent which says they were not expecting such dire data. It also suggests that they expect interest rate rises to stop in their tracks.
I will get to interest next…
@Neil Ibrell, price is a blunt instrument.
There are still plenty of 4×4’s hurtling around at speeds well over the limit because their drivers dont have to care about the cost of fuel while many lower income households cant afford food or heating, let alone travel
Agreed
Income distribution is wrong
Agreed about the 4 x 4 s but also the amount of executive sized homes springing up in rural areas despite austerity and BREXIT – some people somewhere have done really well and/or is it the exploitation of farming land sales due to falls in profitability for farming?
See a blog to come, hopefully later today
From the ONS:
“Compared with the same period a year earlier, sales volumes over the last three months rose by 5.4% while sales values rose by 13.8% reflecting an annual implied deflator (or implied growth in prices) of 8.4%.”
Gosh. The ONS does advise caution on interpreting that implied inflation rate but nevertheless that’s quite something.
Is it essentially correct to say that if GDP is rising at, say, 1%, yet inflation is running at 5%, then consumption and activity are falling – by that 4% difference?
Yes