UK: Focus on retail sales and BoE – TDS

Analysts at TDS suggest that ahead of today’s BoE decision, we get Nov retail sales and they’re looking for sales to fall by -0.3% m/m, which is quite a bit softer than consensus of +0.4%.

Key Quotes

“This would be the first downside surprise to retail sales for the month of Nov since 2012, as markets have tended to underestimate the impact of the growing Black Friday phenomenon in the UK. However, anecdotal evidence suggests that Black Friday sales were much softer than in recent years, likely related to the pinch in real income growth, so we’re looking for a below-consensus result.”

“For the BoE, the unanimous consensus is rates on hold. After hiking rates last month and clearly communicating an “on-hold” policy stance, there’s very little need for the MPC to say much at all at this meeting, so we expect the statement to be largely copied/pasted with few changes.”

“Today also brings the first day of the EU Leaders’ Summit, where they’re fully expected to sign off on the EU-UK agreement reached last week, which will mark the beginning of phase II of the negotiations.”