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Andy Bruce

UPDATE 2-British shoppers and factories enjoy post-election bounce

8:05am EST

* UK retail sales beat forecasts in January, up 0.9% m/m * CBI industrial orders gauge rises to six-month high * Sales growth excluding fuel strongest since May 2018 (Wraps in CBI industrial orders data, adds detail on outlook) By David Milliken and Andy Bruce LONDON, Feb 20 British shoppers started spending again early this year after a sluggish end to 2019 and industrial orders hit a six-month high, further signs that improved sentiment since December's election is translating into stronger economic activity. Retail sales beat forecasts to rise by 0.9% in January after a 0.5% monthly decline in volumes in December, Britain's Office for National Statistics said on Thursday. The recovery was more marked if fuel sales are excluded, which can give a better picture of underlying demand. Sales on that basis rose 1.6% on the month, the most since May 2018 and above all forecasts in the Reuters poll. Factories reported stronger order books for February as well, with a monthly survey by the Confederation of British Industry pointing to the biggest rise in six months, though they remained below their long-run average. Consumer and business demand faltered in the latter part of 2019 as parliament deadlocked over Brexit, preventing Britain's economy from growing at all in the last quarter of 2019. Following a snap election in December, Prime Minister Boris Johnson returned to office with a comfortable majority. Business and consumer sentiment has improved since then, as Britain left the European Union on Jan. 31 with an 11-month transition deal. The data supports the Bank of England's decision to leave interest rates unchanged last month, on expectations the economy will recover early this year. Sterling erased some earlier losses after the figures came out. "The British consumer is a hardy beast and having weathered the pre-election uncertainty, we have charged back into the shops," Jeremy Thomson-Cook, chief economist at payments company Equals Group, said. However, some economists were less sure the pick-up would last, with unusually wet weather and concerns about coronavirus expected to dent consumer demand this month. SLOWER WAGES Separate data earlier on Thursday showed employers had made the weakest annual pay offers in more than a year to staff during the three months to the end of January, and many economists predict Brexit uncertainties will re-emerge soon. Annual sales growth remained lacklustre in January, up just 0.8% on the year after 0.9% annual growth in December, broadly in line with economists' forecasts. Sales at petrol stations fell by 5.7% in January, the most since April 2012, which the ONS linked to higher fuel prices. Clothing sales grew by the most since May 2018 after several months of weakness. Looking at the three months to January as a whole, annual sales growth was the weakest since May 2013. Excluding fuel, sales did not grow at all between August and December, the weakest such run since comparable records began in 1996. Earlier in 2019, consumer demand had helped support growth, while businesses had put investment on hold until the course of Brexit became clearer. Britain has now left the EU, and after the 11-month transition expires at the end of the year, customs checks and new tariffs on trade with the EU are likely. "It's probably still too early to say whether we've seen the end of the slowdown in the sector," CBI economist Alpesh Paleja said after the improved orders data. "Notwithstanding improving optimism, the sector is still grappling with longer-term uncertainty over the UK's future relationship with the EU." (Editing by Larry King)

UK inflation unexpectedly hits six-month high in January, pushed up by fuel prices

Feb 19 2020

LONDON British inflation unexpectedly rose to a six-month high in January, pushed up by higher petrol prices and a smaller-than-usual drop in airfares, official data showed on Wednesday.

UK shopping, house prices and hiring rise in post-election pick-up

Feb 07 2020

LONDON British shoppers, home-buyers and employers grew more upbeat last month, as reports of the biggest rise in high-street sales since 2014 and the largest increase in house prices in nearly two years added to signs of a post-election bounce.

Plan to double UK economic growth unlikely to succeed: NIESR

Feb 05 2020

LONDON The goal of British finance minister Sajid Javid of doubling the pace of economic growth has only a one-in-five chance of success, a think tank said, citing the huge task of snapping the country out of its chronic run of poor productivity.

UK economy's post-election rebound strengthens in January - PMI

Feb 05 2020

LONDON The British economy's post-election bounce gained strength in January as services companies enjoyed the strongest influx of new orders since mid-2018, a closely watched survey showed on Wednesday.

UK consumers remain cautious as BoE meets on rates

Jan 28 2020

LONDON British retail sales flat-lined in late December and early January, according to a survey that showed no change in weak consumer spending ahead of the Bank of England's finely balanced decision whether to cut interest rates this week.

UPDATE 1-UK consumers remain cautious as BoE meets on rates

Jan 28 2020

(Adds economist reaction, background) By Andy Bruce LONDON, Jan 28 British retail sales flat-lined in late December and early January, according to a survey that showed no change in weak consumer spending ahead of the Bank of England's finely balanced decision whether to cut interest rates this week. Other recent surveys have pointed to a jump in optimism among businesses and households after Prime Minister Boris Johnson's landslide election win last month. But the Confederation of British Industry's monthly retail sales gauge was steady at zero in January and retailers cut orders with suppliers as stocks of goods built up. "The CBI distributive trades survey pointed to stable, lacklustre retail sales in January, thereby suggesting that the decisive general election result failed to give an imminent boost to consumer spending," said economist Howard Archer of the EY ITEM Club consultancy. Allan Monks, an economist at JP Morgan, said he thought the BoE's Monetary Policy Committee would not announce a rate cut on Thursday after the signs of a pickup in confidence, the housing market and job creation. "Most on the MPC will probably have made up their minds by now. But this is a survey which we think will appeal to the doves as part of a decision to vote for lower rates," he said. There were some hints of an improvement in the CBI's data. Sales avoided their usual fall in the first month of the year and for the three months to January, its measure of retail sales was the strongest in a year. But the CBI described the outlook for retailers as tough. "A challenging Christmas has extended into the New Year, with little expectation of any improvement soon," CBI deputy chief economist Anna Leach said. The boss of electronics group Dixons Carphone said last week he was not counting on the British consumer market improving, although the owner of the Primark clothing brand said there was too much gloom about the outlook, citing Britain's sound economic fundamentals. Economists say the BoE is likely to take some comfort from official data last week which showed stronger-than-expected job creation in the three months to November. But policymakers are also likely to worry about a drag on the economy from uncertainty about Britain's chances of striking a trade deal with the European Union before a deadline at the end of December. Britain is due to leave the EU on Friday when an 11-month, no-change transition period will begin. Economists polled by Reuters expect a 6-3 vote by the MPC to keep rates at 0.75%. The decision is due to be announced at 1200 GMT on Thursday. The CBI survey was based on the responses of 51 retailers between Dec. 16 and Jan. 14. (Reporting by Andy Bruce Editing by William Schomberg and Giles Elgood)

Confidence rises in UK economy after election, but will it last?

Jan 26 2020

LONDON Prime Minister Boris Johnson's emphatic December election win has triggered a burst of optimism among British businesses and consumers, weakening the case for a Bank of England interest rate cut this week.

UK business improves after election, weakening case for rate cut, PMIs suggest

Jan 24 2020

LONDON British companies are enjoying their best month in more than a year, a survey indicated on Friday, the strongest evidence yet of a post-election boost to the economy that could keep the Bank of England from cutting interest rates next week.

UK business perks up after election, weakening case for rate cut - PMIs

Jan 24 2020

LONDON British companies are enjoying their best month in more than a year, a survey showed on Friday, the strongest evidence yet of a post-election boost to the economy that could deter the Bank of England from cutting interest rates next week.

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