UK Retail Sales drop in September, Mortgage Approvals rise. Pound falls in currency trading. | CountingPips Forex Blog

October 23, 2008 - Forex Economic News

UK Retail Sales drop in September, Mortgage Approvals rise. Pound falls in currency trading.

Retail Sales data was released today out of the United Kingdom and showed that retail sales fell in September according to a report by National Statistics. September's retail sales decreased by 0.4 percent following an increase of 1.2 percent in August. September's yearly rate of change was an increase of 1.8 percent over last year which was well below August's yearly increase of 3.3 percent. Market forecasts had expected a decrease of 0.7 percent in September's retail sales and a 2.0 percent yearly increase. Contributing to the decline was a Pound Sterling falling in Currency Trading decline of 2.3 percent in textile, clothing and footwear stores while sales at household good stores fell by 2.0 percent.

U.K. retail sales for the third quarter, despite September's decline, showed an increase of 0.1 percent from the second quarter. On an annual basis, the July through September quarter total retail sales increased by 2.3 percent over the third quarter of 2007. Contributing to the sales gain for the third quarter was an increase of 2.6 percent in the non-store retailing and repair sector. Non-food store sales increased by 0.6 percent in the third quarter while predominantly food store sales fell by 1.1 percent in the July to September quarter.

A separate report out of Britain showed that mortgage lending increased for the month of September. According to the British Bankers Association, net mortgage lending increased in September by 3.6 billion pounds following August's increase of 2.1 billion pounds. Despite the increase, September's gain was below the six month mortgage lending average of 4.1 billion pounds. The number of mortgage approvals also increased in September as 23,422 mortgages were approved compared to 21,342 mortgage approvals in August. The approvals for September were below the six month average of mortgage approvals at 27,481 and 56.6 percent below the mortgage approval level of September 2007.

BBA statistics director, David Dooks, commented in the report that, “It was not surprising to see continued low levels of mortgage lending and approvals in September, ahead of the Government's banking support announcements. Compared to a year ago, the mortgage environment has changed significantly, with supply restricted as a consequence of the situation in financial markets and demand at a much reduced level" and that, "Pressure on household budgets, the slowing economy and fragile consumer confidence are suppressing consumer appetite for unsecured borrowing".

Pound Sterling falling in Currency Trading.

The British pound sterling has been feeling the effects of the lower retail sales numbers in currency trading today as it has fallen verses other major currencies. The pound is falling for the fourth day in a row against the U.S. dollar as the GBP/USD trades at 1.6123 today in the U.S. session at 12:32pm ET. The GBP/USD opened today at approximately 1.6224 and has fallen all the way from trading above 2.0000 on July 22nd. The euro has also advanced verses the pound today as the EUR/GBP has ascended to trading at 0.7959 from opening at 0.7862 and has gained for the third day in a row. The pound is declining verses the Japanese yen for the fourth straight day as the GBP/JPY opened today's trading at 157.20 and has declined to trading at 156.11 in the U.S. trading session.

GBP/JPY Chart - The British pound sterling falling verses the Japanese yen for the fourth day in a row(Daily Chart).

Today's Forex Chart

tags: uk retail sales, mortgages, housing, gbp, currency trading

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