U.K. consumer spending likely to have firmed slightly in recent months

U.K. consumer spending surveys are far from conclusive. The BRC Retail Sales Monitor that was released on Tuesday showed that August was a bit better month for retailers, with sales on the High Street rising by 1.3 percent year-on-year on a like-for-like basis in August, up from 0.9 percent year-on-year in July.

Looking through the distortions to the data associated with the timing of Easter, this seemed to be the most solid reading in ten months. However, total store sales through the three months to August rose 1.9 percent, a bit different to the average rate seen in the earlier four months, albeit notably stronger compared to the start of the year. As in the earlier months, sales growth was greatly because of rising spending on food that rose 3.2 percent, partially due to higher inflation. In the meantime, non-food sales rose just 0.9 percent, after falling 0.4 percent in the prior month.

“Overall, the BRC survey suggests that consumer spending might have firmed slightly in recent months, albeit with consumers focusing mainly on more essential purchases”, said Daiwa Capital Market Research.

At 21:00 GMT the FxWirePro's Hourly Strength Index of British Pound was slightly bullish at 61.7563, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -74.6307. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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