After manufacturing UK consumers dampen outlook

Weak growth in retail segment joined manufacturing weakness and noflation to cloud the outlook for Bank of England (BOE) rate hike.

Last weekend however, even maintaining its rhetoric that next move in interest rates to be up, Bank of England governor Mark Carney suggested it is likely not certainty.

Latest report shows weakness in consumer purchase in spite of lower oil price and greater discount across UK.

• According to CBI survey, which was done on 112 firms, retail sales volume growth slowed in October after strong showing in September. However in spite of weakness retail sales growth has remained above average.

Key highlights -

• 38% of retail sector respondents said volumes were up from a year ago, and 20% said they were down, giving a balance of +19%, mark slowdown from previous month (+49%) and was below expectations (+51%).
• Retailers expect sales volumes to grow at a somewhat stronger pace next month (+24%), with 40% expecting them to rise and 16% to fall.
• Best results posed by normal goods (+40%), followed by clothing (+36%), non-store (+25%) and grocers (+20%).
• The volume of orders placed upon suppliers grew (+19%), but was well below expectations (+44%) and firms anticipate a further slowdown in growth next month (+8%).
• Motor traders are however having a great time, with 93% saying sales are up on last year, while only 7% reported sales to be down.
• Wholesalers are however having a troubled time, with 32% reporting higher sales volume and 35% reporting it lower.

Retail segment and services sector have been posting strong growth so far, any further weakness would push back hike expectation from Bank of England (BOE) well into the future.

Pound is currently trading at 1.526 against Dollar.