U.k. CBI distributive trades survey rises in may, pressures in retail sector likely to persist
Source: FxWire Pro - Commentary / 23 May 2018 22:35:17 Europe/London
The U.K. CBI Distributive Trades survey implied that the retail sector recorded some relief in the middle of the second quarter following a few particularly challenging months when stories about store closures dominated the news pipeline. The headline indicator for sales growth returned to positive territory in May, rising to a four-month high of 11 percent.
But, adjusted for the time of the year, the net balance for sales continued to be negative and was lower than the long-term average. A wider confidence in the sector continued to be weak, not least given that slightly stronger wage growth and slightly weaker inflation have hardly had any effect on stretched consumer budgets yet.
A net balance of -8 percent of retailers anticipate their business situation to fall in the three months ahead, while their investment intentions for the coming 12 months turned negative.
“So, while tomorrow's ONS retail sales data are expected to show a small recovery in April following a 1.2 percent M/M drop in March, the broader picture for the UK high street appears to remain subdued”, noted Daiwa Capital Market Research in a report.
At 21:00 GMT the FxWirePro's Hourly Strength Index of British Pound was highly bearish at -144.661, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 17.0656. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
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