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The retail sales report also shows a shift away from the main streets and on e-commerce sites, with every fifth pound being spent online in December.
Ian Geddes, Sales Manager at Deloittesays:
A record share of sales was achieved online during this period: 20% of total sales. December 2018 is the most digital Christmas ever.
It's worth noting that the period includes Cyber Monday, the highest record that could have boosted overall sales and explained why December had a slow start for many retailers. This slowdown shows a shift in consumers who make many of their Christmas purchases before December.
Jeremy Thomson-Cook, Chief economist at World First, argues that a cocktail of factors - including Brexit - is responsible for slowing spending:
"Retailers have learned that Christmas is not just a December phenomenon, and we need to look at the development of the UK High Street in November and December to get a better idea of how much retailing is under pressure. During the fourth quarter, retail sales fell 0.2%.
Everything from lower consumer confidence, Brexit fears, higher interest rates, currency fluctuations, falling consumer credit and lower business rates made 2018 a tough year for retailers and 2019 could easily repeat such pain.
UK retail sales: immediate response
UK retail sales in December are even worse than expected David Madden from CMC Markets, especially if you strip fuel.
economist Rupert Seggins explains that the retail sector did not achieve economic growth this quarter - not a good sign.
Grace Blakeley, the New Statesman's Economic commentator, argues that people are too indebted and run down through austerity measures to keep the main road healthy:
Here are the key points from the sales data just released (and online here).
- In the three months to December 2018, estimates are made in the purchased quantity reduced by 0.2% with decreases in all major sectors except fuel.
- Compared with the previous month, the amount purchased in December 2018 reduced 0.9% as all sectors except grocery stores and gas stations declined over the month.
- Looking at the annual growth rates, the total amount of 2018 increased by 2.7% in the purchased quantity; an annual slowdown compared to the high of 4.7% in 2016.
- In December 2018, online retail accounted for 20% of total retail sales, up 13.9% year-on-year.
British retail sales are declining
Newsflash: UK retail sales fell in December as buyers' purchases fell.
Retail sales fell 0.9% mom in December, according to new statistics from the Department of Statistics.
Spending on gasoline (which is volatile) and retail sales were 1.3% lower in December than in November.
This is partly due to Black Friday sales (November 23), which have pulled some Christmas issues forward.
However, retail sales decreased by 0.2% in the last three months - the first decline since March.
This will give cause for concern that the United Kingdom economy will stall - as long as consumer spending is concerned.
Rhian Murphy, ONS Sales Manager says:
"After growing in November, as buyers made more Black Friday deals as they continue their Christmas shopping, retail sales weakened in December."
"Retail sales fell slightly in the last three months of 2018. Only petrol stations saw significant growth.
Mnuchin's obvious offer of assistance to China comes just days after Beijing's announcement that taxes would be cut to help businesses, many of whom are fighting in the trade war.
Ryanair profit warning
Shares of airlines are not participating in today's rally after Ryanair hit shareholders with another profit warning.
Low-cost airline shares fell 1.5% after it became known that winter tariffs were below forecasts. EasyJet has lost 2.5%.
US withdrawal from Davos
A breakthrough in the trade war could come, but not in Davos next week.
President Donald Trump has canceled plans to send US officials, including Finance Minister Mnuchin and sales representative Robert Lighthizer, to the World Economic Forum.
This means that the US can not discuss the trade with the Chinese representatives.
Trump has also prevented House spokeswoman Nancy Pelosi from visiting troops in Afghanistan with a military plane as white feuds between the White House and the Democrats intensify because of the government shutdown (something else the markets need to worry about) ,
European stocks have opened and reached their highest level since the beginning of December.
Optimism regarding trade talks between the US and China has pushed commodity prices to their highest levels in months.
Investors expect higher demand for steel and iron ore if a breakthrough is achieved.
Reuters has the details:
The most traded iron ore on the Dalian Commodity Exchange rose 3.2% to close at 528 yuan (US $ 78.01), just short of its 530 yuan peak, its highest level since early March last year.
"The signs of China's recent trade talks are promising and, despite the lack of concrete results, have fueled market optimism," ANZ Research said in a statement.
After the WSJ report, the shares jumped overnight across the Asia-Pacific region.
China's benchmark Shanghai Composite gained almost 1.5%, with Japan up 1%.
Investors hope that Steve Mnuchin could calm the trade war Adam Cole of the Royal Bank of Canada:
Trade optimism once again dominates the takeover price action. The US Department of the Treasury's Mnuchin (Volunteers vs. Lighthizers and Trumps) report in the Wall Street Journal suggested lowering prices for China to support the markets.
The Treasury Department denied the report, but stock futures are still up 0.3%.
Introduction: Mnuchin & # 39; considers the lifting of China tariffs
Good morning and welcome to our rolling news coverage of the global economy, financial markets, the Eurozone and business.
In the US-China trade wars, investors are becoming confident as the clock shuts off.
Overnight, the Wall Street Journal has brought new levels of comfort to the markets and reports that the US Treasury Secretary has discussed the lifting of some of the tariffs imposed on China.
The logic of Steven Mnuchin states that Beijing's offer of a carrot could bring the breakthrough in the ongoing trade war before the new negotiations in late January.
As the journal says:
US officials are currently debating tariffs on Chinese imports to calm markets and provide Beijing with an incentive to make deeper concessions in a trade battle plaguing the world economy.
Numerous Chinese products are being introduced at the US border, from food and chemicals to machinery. These charges seem to contribute to a strong slowdown in China.
However, the journal also assumes that the sales representative Robert Lighthizer refuses Mnuchin's idea.
And overnight, the White House poured cold water into the term and said:
"No new tariff decisions were made.
We focus on the current 90-day period and the expected visit of Deputy Prime Minister Liu He at the end of this month. "
But hopes of a breakthrough have strengthened Wall Street last night. The Dow closed with 162.3 points by 24,370 points, extending his rally in 2019.
It will also boost European equities this morning:
UK retail sales will show whether consumer spending has come through during the crucial Christmas trading season.
Economists expect a drop in sales of about 0.8% from the previous month, as Black Friday pushed spending into November.
We also receive new data on the morale of US consumers, which may indicate whether government cessation is affecting the economy.
- 9.30 GMT: Retail sales in the UK in December
- 3pm GMT: Survey of American consumer sentiment at the University of Michigan