UK Retail Sales Rise, Stocks Decline

123jump.com Staff
20 Mar, 2008
New York City

UK retail sales in three months ending in February rose 1% from previous three months and jumped 4.7% from a year ago. The rise in sales was recorded in food stores, non-store retailing and repair services. February current budget surplus rose to

[R]1:00AM New York, 6:00PM London – UK retail sales in the three months to February rose 1% and current budget surplus in February was £2 billion.[/R]

London stock averages dropped despite a government report that showed that retail sales increased unexpectedly in the quarter to February. Commodity stocks negatively weighed on investor sentiment on mounting worries over the U.S. economy.

In London trading FTSE 100 fell 0.91% or 50.4 to 5,495.20.

Of the 102 FTSE 100 stocks 46 gained, 54 declined and 2 were unchanged. Anglo America Plc led decliners in the FTSE 100 stocks with a fall of 8.11% followed by Antofagasta Plc declining 6.68%.

Retail Sales Increase

The Office of National Statistics reported on its web site today that sales volume in the quarter to February increased by 1% compared to the previous three months. This follows a 0.7% growth in the three months to January.

The statistics office also noted that three-month growth in sales volume was 1% for food stores, while sales in non-food stores increased by 0.2%. Sales in the non-store retailing and repair sector rose by 7.3% and sales in non-specialized stores dropped by 3.6%.

In addition, total sales volume in the three months to February advanced 4.7% from the comparative period a year ago. Sales for non-food stores grew 5.3%, while sales volume for food stores gained 2%, the largest growth since May 2007.

Non-store retailing and repair sector increased by 18.6%.

According to the statistics office, total sales volume rose by 1% between January and February and sales volume for predominantly food stores increased by 1.6%, the largest for the sector since June 2006.

Sales volume for predominantly non-food stores rose by 0.5%, with sales for household goods stores falling by 4.2%.

Current budget surplus increases to £2 billion

Separately, ONS reported that the public sector showed a surplus on the current budget of £2.0 billion in February of 2008 compared to £700 million in the same period a year ago.

Between April 2007 and February 2008 of the financial year 2007/08, the public sector recorded a deficit of £5.7 billion compared to a deficit of £3.0 billion of the 2006/07 financial year.

Public sector net debt, expressed as a percentage of Gross Domestic Product, was 36.0% at the end of February 2008, compared with 35.5% at end of February 2007. Debt peaked at 43.8% of GDP in 1997, its highest since the mid-1980s. The debt ratio then fell steadily as public sector finances improved, reaching a low of 29.8% in February 2002. Since then it has risen. The Budget forecast for the end of March 2008 is 37.1%.

Net debt was £516.4 billion at the end of February, compared with £481.9 billion a year earlier. The Budget forecast for net debt at the end of March 2008 is £534.5 billion. Also net debt was £516.4 billion at the end of February, compared with £481.9 billion a year earlier.

The Budget forecast for net debt at the end of March 2008 is £534.5 billion.

Gainers & Losers

Rentokil Initial led advancers in the FTSE 100 index shares with a rise of 17.44% followed by increases in Taylor Wimpey of 7.76%, in Alliance & Leicester of 7.28%, in HBOS Plc of 6.16%, and Smith & Nephew of 4.06%.

Retailers rose after a government report showed that retail sales volumes unexpectedly grew in the quarter to February. Tesco rose 3.66%, Sainsbury grew 2.38% and Marks & Spencer increased 2.25%.

Homebuilders rose as well. Persimmon advanced 2.72% and Home Retail Group edged up 2.60%.

Anglo America Plc led decliners in the FTSE 100 index shares with a drop of 8.11% followed by losses in Antofagasta Plc of 6.68%, in Cairn Energy of 6.56%, in Xstrata Plc of 6.27%, and Tullow Oil of 6.23%.

Commodity stocks fell on worries demand will drop as U.S. economic growth slowed. Vedanta Resources plunged 5.37% and Kazakhmys Plc edged up 6.21%.

World Markets Review

In Hong Kong Hang Seng index decreased 758.72 or 3.47% closed to 21,108.22. Australia ASX 200 index decreased 161.60 or 3.06% to close 5,127.50. Market of Japan, India, Indonesia, Pakistan, Philippines and Malaysia were closed.

In South Korea Kospi Index increased 1.16 or 0.07% to close at 1,623.39, in Thailand SET index closed lower 9.56 or 1.18% to 798.11.

In London FTSE 100 Index closed lower 50.40 or 0.91% to 5,495.20, in Paris CAC 40 Index decreased 22.23 or 0.49% to close at 4,533.72 and in Frankfurt DAX index lower 41.23 or 0.65% to close at 6,319.99. In Zurich trading SMI decreased 63.13 or 0.89% to close at 7,009.86.