Tuesday 9th December 2008

British retail sales fell at their sharpest annual pace in more than three years….

…..in November, the BRC survey showed on Tuesday in a grim portent of the all-important Christmas shopping season. Sales fell 2.6% y/y in November, the sharpest drop since the Easter influenced April 2005. Not a good sign.

This morning I was going to try and be a bit positive following the rise in house buyer interest shown in yesterday’s RICS survey. Admittedly, the actual number of sales slumped to a new 30-year low but at least the interest in property was on the increase. This, added to the further sharp declines in inflationary pressures from easier Producer Input Prices (down 3.3% in November alone for a 12-month 7.5% rise) put the skids under Sterling - especially versus the Euro where we established a new all time low. Other than that, yesterday was a bit thin on data so we look to today’s offerings for a bit of stimulus. We have important statistics from Germany and the EU this morning as well as further housing and trade data from the UK. On top of that, there are several Central Bankers speaking on their various economies and the expectation that Canada will cut their interest rates at their meeting this afternoon.

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