GBP/USD remains below 1.30 even as UK Retail Sales beat estimates with +0.8% MoM in August

The UK retail sales came in at +0.8% over the month in August vs. +0.7% expected and +3.6% previous. The core retail sales, stripping the auto motor fuel sales, stood at +0.6% MoM vs. +0.4% expected and +2.0% previous.          

On an annualized basis, the UK retail sales stood at +2.8% in August versus +3.0% expected and +1.4% prior while the core retail sales rose by 4.3% in the reported month versus +4.2% expectations and +3.1% previous.

Main points (via ONS)

“In August, there was a mixed picture within the different store types as non-store retailing volumes were 38.9% above February, while clothing stores were still 15.9% below February’s pre-pandemic levels.

Spending for home improvements continued to rise in August as sales volumes within household goods stores increased by 9.9% when compared with February.

Online retail sales fell by 2.5% in August when compared with July, but the strong growth experienced over the pandemic has meant that sales were still 46.8% higher than February’s pre-pandemic levels.”

FX implications

GBP/USD kept its recovery mode intact around 1.2970, as the pound shrugged-off mixed UK macro news. The spot now trades modestly flat on the day, having reversed from daily lows of 1.2941.