July 18, 2013
Eco Analysis - UK economy on track for a firm Q2 (M. Martinez)
In the UK, retail sales increased in June and are now up 0.9% qoq in Q2. This bodes well for Q2 GDP number to be released next week. (SG: 0.6% qoq). Signs that a cyclical recovery is ongoing have become clear in the UK, in contrast to the euro area. In France, FM Moscovici announced that the Livret A rate will be cut to 1.25% from 1.75% from 1 August. In Greece, the parliament approved the bill that clears the way for the release of the remaining IMF/ESM fund tranche
■ UK retail sales increased by 0.9% in Q2
UK retail sales ex auto fuels rose by 0.2% mom in June after a 2.1% increase in May. The yoy rate stands at 2.1% (consensus 1.6%). Food sales were down marginally by 0.1% mom after a 3.0% rise but non-food sales grew by 0.6% after a 0.9% rise in May. Clearly the numbers are stronger than the BRC survey suggested. Retail sales have been extremely volatile. Since the start of the year, mom growth has ranged from -1.2% to +2.1% (see the chart).
Today's number support our view that Q2 GDP number - due for release next week- is set to be firm (SG: 0.6% qoq). Sales including fuels were up by 0.9% qoq in Q2 (1.8% yoy) which points to a positive consumption number in the Q2 national accounts. Our view is that the gap between the UK and the euro area economies is widening and that this situation is going to last medium term. SG growth forecasts for the UK economy stand at 0.9% in 2013 and 1.4% in 2014, while we see a 0.8% contraction in 2013 and a sluggish recovery in 2014 (0.4%) for the euro area.
■ Greek parliament approves public sector job cuts
Overnight, 153 out of 293 present lawmakers voted an important budget bill that plans to put 25k public employees on notice for possible dismissal. This was a key test for PM Samaras's two-party coalition after a third party DHMAR left the coalition in June. It is now very likely that the Eurogroup will release the planned IMF/Troika payment on 24 July (€6.8bn).
No comments:
Post a Comment