U.K. private consumption growth likely to stay weak in Q3

Consumer spending indicators of U.K. have come in mixed recently, unable to provide a clear picture of how private consumption has been performing in the third quarter. For instance, the CBI Distributive Sales survey implied that retail sales growth rebounded markedly in July, with the headline sales indicator rising to 22 percent, the second highest level in 2017.

However, the August survey disappointed, with the index dropping to -10 percent, the weakest since the wake of the Brexit referendum last year. This left the July-August average at just 6 percent, considerably lower than the second quarter average.

Retailers anticipate sales to rebound; however, a sharp fall in orders placed with suppliers implied a lack of confidence in demand, especially against a backdrop of falling real wages, stated Daiwa Capital Markets Research.

With new car sales expected to remain sluggish in months ahead, while housing market and consumer sentiment indicators also stay weak, private consumption growth is expected to stay subdued in the third quarter, giving little or no support to the economic growth, added Daiwa Capital Markets Research.

At 22:00 GMT the FxWirePro's Hourly Strength Index of British Pound was slightly bearish at -69.5625, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 13.9156. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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