UK retail sales soar in January
Following a disastrous December, UK retail sales rebounded dramatically in January, with volumes rising more than 3%.
These numbers today come after an extremely disappointing December in which retail sales fell by more than 3%. Economists had forecast retail sales to be just 1.2% up in January.
(AI Video Summary)
The UK economy
The UK economy has recently entered a rough patch, experiencing a recession in the last two quarters of 2020. However, retail sales numbers tell a different story. In January, sales shot up by an impressive 3.2% compared to the previous month, surpassing the predicted 1.5% increase. This follows a record-breaking surge in December that was the highest monthly increase since the pandemic hit in 2021. Despite the recession, these strong retail sales figures point to a promising start for the London markets.
GBP/USD
When we take a look at the five-minute chart of the GBP/USD, we notice a significant jump in the pound's value once the retail sales numbers were released. This upward trend suggests a positive response from the market. However, when we examine the daily chart, we see that the pound's value seems to be stuck at low levels. There's even a chance that the support level of 1.2518 might be broken soon, which could lead to further declines. If this happens, we could be witnessing a topping pattern and potentially see the pound drop to 1.22, a level not seen since December of last year.
In conclusion, while the UK economy is officially in recession, the retail sales numbers paint a more optimistic picture. The substantial increase in January indicates a strong start for the London markets. However, the value of the pound remains uncertain. Although there has been a temporary rise, the currency's long-term trend remains stagnant, and there is a possibility of further declines if the support level is breached.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.