Summary:
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UK retail sales in January came in above expectations spurred by spending on clothing
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The recent data have been mixed, Brexit takes precedence though
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GBP trades at a critical place following the release
Strong start to 2019
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Create account Try a demo Download mobile app Download mobile appUK retail sales surprised to the upside at the beginning of this year being spurred by increased purchases of clothing. Despite the robust release the British pound keeps moving sideways being slightly up against the US dollar at the time of preparing of this analysis.

Retail sales jumped in January reaching its fastest pace in six months. Source: Macrobond, XTB Research
Headline sales rose 1% MoM in January smashing the median estimate of a 0.2% MoM increase. At the same time core inflation, stripping out auto fuel, moved up 1.2% MoM, also well above the consensus of a 0.2% MoM rise. On top of that, we got upward revisions to the December’s data where headline sales were revised to -0.7% from -0.9%, while core sales were revised to -1% from -1.3%. The details showed that clothing sales picked up as much as 2.1% mainly due to substantial discounts following Christmas. The data released by the ONS showed an upward revision for the fourth quarter sales which saw no change compared to a previous estimate of a 0.2% decline. It also needs to be said, having in mind the yesterday’s gloomy release from the United States, that a change in consumers’ preferences is increasingly visible in retail sales data across various economies around the world. Black Friday could be blamed for such a change. The data was more or less negligible for the pound which keeps being driven by Brexit developments.
Technical analysis

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