U.K. private consumption likely to grow at 0.6pct in Q4 15

Volume of retail sales in U.K. expanded by 1.7% month on month for November. The non-food stores has given its best performance since October, 2014 as increased by 2.5% month on month and contributed 1.1pp to the overal retail sales in November.

Other components of the retail sales like food stores non-store retailing and auto fuel increased by 0.8%, 1.9% and 1.9% m/m respectively. 

The better performance of the retail sales indicates private consumption growth of the economy in Q4, 2015 will be solid. 

"Our baseline scenario remains that private consumption growth should ease slightly (by 0.1pp) to 0.6% q/q in Q4 15, although we acknowledge some upside risk with today's outturn. Further out, in light of decelerating nominal wage growth and us expecting inflation to pick up at the turn of the year, as well as the Government's impending fiscal consolidation, these factors are all likely to weigh further on households' spending habits, eating further into consumption. As such we see it easing to 0.4%/0.3% q/q by mid-2016", argues Barclays.