18th February 2021
Retail is an economic indicator that tracks consumer demand for finished goods by measuring purchases of durable and non-durable goods over a defined period of time. It is the primary gauge of consumer spending; an accurate measure of retail sales is vital for gauging the economic health of the United Kingdom because consumer spending accounts for the majority of the overall economic activity. Data on retail sales is compiled once a month by the office for national statistics.
The UK’s economy over the last few months has been characterized by the Brexit deal and the fatalistic impact of covid-19. The possibility of the Brexit deal unlocking significant investment is high but its uncertainty has weighed heavily on the UK as the economic consequences of the deal fall on the UK disproportionately. The effect of covid-19 on the economy can never be over-emphasized as it has resulted in companies trimming down a number of staff and some shutting down completely which has further stared up the UK’s unemployment rate.
UK’s economy shrank by a record 9.9% in 2020, and the unemployment rate was estimated at 4.5%, 0.6 percentage points higher than a year earlier and 0.4 percentage points higher than the previous quarter.
Economists have predicted that unemployment will likely surge to 2.6 million by mid-2021 depicting a slow rebound of the UK’S economy amidst the continuous effect of covid-19 and the uncertainty surrounding the Brexit deal but the good news is that in response to this, the government has recently ramped up fiscal support, announcing a revamped version of the furlough scheme for firms forced to close temporarily. Some of the support measures put in place to cushion the blow are; the coronavirus job retention scheme, business rates holiday, and deferral of VAT which have been a lifeline for many businesses.
Looking forward to the likely shadow that last year’s economic setback will cast on this year, Chancellor Rishi Sunak stated that national living wages will be increased, support to help people get new skills and jobs are top priorities of the government, as they have met the vaccination targets, more so, over 200 billion pounds have been spent helping over 300million people who were self-employed before the pandemic
However, Traders should brace themselves up for a period of high volatility, as an increase in retail sales will strengthen GBP while a decrease in retail sales will weaken the GBP. The pairs to watch for during the news release are:
GBP/USD, GBP/CAD, GBP/CHF, GBP/JPY, GBP/NZD, GBP/AUD, EUR/GBP
Time Schedule for Retail Sales release
Date: Friday, February 19th,2021
Time: 8:30am (GMT+1)
Author: Francis Idowu
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