Investors get a chance to see just how much impact the UK’s shrinking real wages have had on the retail sector this Thursday, as the latest sales figures are released.
While October’s forecast 0.1% reading would be far better than the -0.8% shock seen in September, it’s hardly the kind of number that’ll reassure the markets that UK consumers are coping with the erosion of their pay packets, especially not heading into the key Christmas period.
Neither the FTSE nor the pound is looking too excited at the prospect of the retail sales data. The UK index is still below 7400 after dipping 0.1% – admittedly, a smidge above yesterday’s lows, but with worrisome flashes of red in the mining sector and a 1% decline for Shell (LON:RDSa) – while sterling is struggling to get together any momentum against the dollar and the euro.
Elsewhere Royal Mail (LON:RMG) got a pre-Christmas present this Thursday, (briefly) crossing £4 for the first time in 3 months following its half year results. Revenue was up 2% to £4.8 billion, while pre-tax profit effectively double to £168 million thanks to the (adjusted operating profit, on the other hand, slipped £2 million to £250 million). There was the usual split between its UKPIL and GLS divisions; the former saw sales flat, with an UK election-improved 3% drop in letters revenue countered by a 5% rise in parcels, while the latter managed a 9% surge in revenue. The sooner Royal Mail can weight its business towards parcels and GLS, and away from letters – which has been giving off a deathly stench for a while now – the better.
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