UK: Dismal December retail sales - BBH

Research Team at BBH notes that the UK reported dismal December retail sales as the 1.9% headline decline on the month is the largest decline in four years.  

Key Quotes

“The Bloomberg median forecast was for a 0.1% decline.  Adding insult to injury, the November series was revised to -0.1% from 0.2%.  The decline was broad based.  There are a few post hoc explanations, like rising prices and that Black Friday discounts in November took sales from December, but nothing particularly convincing.  As a whole, retail sales rose 1.2% in Q4, which regarding next week's first estimate of GDP is worth a one-tenth of one percentage point.”

“Sterling had seemed to be running out of steam near $1.2370, and the data saw it fall to almost $1.2280 before finding support.  Sterling is poised to snap a two-week fall.  Recall it had begun the week by gapping lower amid hard Brexit signals and briefly dipped below $1.20.  Sell the rumor, buy the fact, coupled with the weaker US dollar tone in general, helped sterling recover.  However, it was unable to rise through the $1.2430 area, where it had peaked ahead of the hard Brexit talk.”