Friday 23rd May 2008

Decline in UK Retail activity not as bad as forecast

Yesterday’s retail sales from the UK showed a fall again from last month’s figures as faster inflation, lack of credit and the slump in the housing sector all taking their toll.

Sales were down 0.2% from March. Economists had forecast a 0.5% drop. Year on year the sales were still up 4.2% driven mainly by the continuing popularity of software; as the gamers amongst us will know titles such as Grand Theft Auto pushed these figures higher with huge sales volumes.

It’s not all fun and games though following this continuing negative trend in spending. Bank of England Governor Mervin King hinted that the UK is edging ever closer to recession as confidence continues to fall.

Over the water the US jobless claims fell 9,000 to 365,000, from a revised 374,000 the prior week. Forecasts were for significantly more than this which demonstrates that employers are keeping up their promises to their key workers regardless of the slowing economy.

Eurozone industrial orders fell at twice the rate expected from forecasts in March. The main reasons were high oil prices, Euro gains and the ever negative US economy. The orders fell 1.0% from February (the first decline in three months), after increasing a revised 0.2 percent the previous month.

Key releases today;

EUROZONE 9:00 Flash manufacturing PMI expected at 50.5

UK 9:30 GDP Revised (Q1)

US 15:00 Existing Home Sales (April) forecast 4.85

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