U.K. Retail Sales Unexpectedly Holds Flat in August
Consumer spending in the U.K. held flat in August amid expectations for 0.1% rise, while the annual rate of consumption increased 2.1% from the previous year, and household may continue cut back on spending over the coming months as they face a weakening labor market paired with tightening credit conditions. The breakdown of the report showed demands for textile, clothing & footwear slumped 1.3% to lead the slump in spending, with non-food store sales falling 0.6% during the month, while discretionary spending on food increased 0.7% from July. As the outlook for private-sector spending, one of the biggest drivers of growth, remains weak, the Bank of England is likely to maintain its current policy in order to stimulate the ailing economy. However, as policy makers continue to see a risk for a slower recovery, the central bank may ease policy further over the coming months and expand the scope of its asset purchase program in an effort to stem the downside risks for growth and inflation.