U.K. retail sales activity remains solid in August, likely to be temporary phenomenon

U.K. retail sales activity continued to be strong in August, according to the CBI Distributive Sales survey today. A balance of 29 percent of retailers recorded a rise in sales from a year ago, up from 20 percent in July and not far off the nine-month high of 32 percent in June. The three-month average for this indicator reached the highest level since the end of 2016 strengthening the impression that momentum over the summer months was indeed exceptionally solid.

Nevertheless, other details of the survey were less positive. For instance, adjusted for the time of year, the sales indicator dropped considerably, at -2 percent, merely consistent with its average in the past year and a half, while the index representing new orders placed with suppliers hit a ten-month low of -19 percent.

Looking ahead, companies anticipated new orders to fall further in the month ahead and that should add to the deterioration in the overall business situation over the autumn. The sector is facing several significant challenges and thus, the rapid rate of retail sales growth in recent months is expected to prove to be a temporary phenomenon, stated Daiwa Capital Market Research in a report.

At 20:00 GMT the FxWirePro's Hourly Strength Index of Euro was neutral at -8.56869, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 20.2491. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex