Indicator Digest - CMS Forex

Retail Prices

Main Indicator: BRC Shop Price Index y/y

Most Recent Release

May
7th, 2008

Actual

Forecast

Revised Form

1.2%

1.1%

N/A

For April
Provided by: British Retail Consortium

Inflation at retailers increased 1.2% annually on the back of a 4.7% annual increase in food prices. In March, food prices were up 4.1% on the year. On the month, food prices rose 0.7% and offset a 0.2% decrease in non-food prices, and resulting in an overall inflation rate of 0.1% on the month. . The inflation level is actually subdued as retailers continue to offer widespread discounts, trying to ramp up lackluster demand.

Table of Past Data

	9/5	10/3	11/7	12/5	1/9	2/6	3/5	4/9	5/7

Actual	0.4%	0.4%	1.1%	1.1%	1.0%	1.2%	1.3%	1.1%	1.2%
Forecast
Previous	0.6%	0.4%	0.4%	1.1%	1.1%	1.0%	1.2%	1.3%	1.1%
Revised From	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A

Secondary Indicator: Retail Price Index y/y

Most Recent Release

May
13th, 2008

Actual

Forecast

Revised Form

4.2%

3.9%

3.8%

N/A

For April
Provided by: Office of National Statistics

Retail Price Index m/m: 0.9%, forecast 0.6%, pr. 0.3%

The retail price index, which is a measure of the cost of living used in salary negotiations, rose to 4.2% in April, the most since November. Higher fuel and utility bills are cutting into consumer spending, and may lead to workers demanding high wage increase. See the comment for CPI for more analysis.

Table of Past Data

	7/17	9/18	10/16	11/13	12/18	1/15	2/12	3/18	4/15	5/13

Actual	4.4%	4.1%	3.9%	4.2%	4.3%	4.0%	4.1%	4.1%	3.8%	4.2%
Forecast	4.2%	4.0%	4.0%	4.1%	4.2%	4.0%	4.1%	4.2%	3.9%	3.9%
Previous	4.3%	3.8%	4.1%	3.9%	4.2%	4.3%	4.0%	4.1%	4.1%	3.8%
Revised From	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A

Past Releases

Retail Price Index y/y

April
15th, 2008

Actual

Forecast

Revised Form

3.8%

3.9%

4.1%

N/A

For March
Provided by: Office of National Statistics

From the Release:

"RPI inflation fell to 3.8 per cent in March, down from 4.1 per cent in February. The main factors affecting the CPI also affected the RPI.

Additionally, there was a large downward contribution from housing. The effect came mainly from mortgage interest payments as lenders passed on February’s quarter point decrease in the Bank rate and, to a lesser extent, from house depreciation which fell this year but rose a year ago. Both mortgage interest payments and depreciation are excluded from the CPI."

BRC Shop Price Index y/y

April
9th, 2008

Actual

Forecast

Revised Form

1.1%

1.3%

N/A

For March
Provided by: British Retail Consortium

Although food prices have seen a sharp rise, the inflationary pressure will not delay BoE's likelihood of cutting rates tomorrow. The BRC's Director General, Stephen Robertson noted that the rising prices comes from the cost-side, and not from a demand pull and thus should leave the table wide open for rate cuts.

Year-on-Year: The BRC-Nielsen Shop Price Index (SPI) reports annual shop price inflation of 1.1% in March, marking a twelfth consecutive month of rising annual prices. During the last six months the retail market has experienced relatively steady inflation ranging from 1.0%-1.3% with March proving no exception.
Month-on-Month: On a month on month basis overall shop prices rose 0.2% in March, a relatively small reduction in comparison with February when prices increased 0.4% month-on-month. There was no reported growth in the price of food products from the previous month, the first time since August last year; however non-food prices increased 0.3% in March, slightly less than February (0.4%).

Retail Price Index y/y

March
18th, 2008

Actual

Forecast

Revised Form

4.1%

4.2%

4.1%

N/A

For February
News Summary from Office of National Statistics

RPI m/m: 0.8%, forecast 0.8%, pr. -0.5%
RPIX y/y: 3.7%, pr. 3.4%

Retail prices were affected by the same forces that pushed up consumer prices. Housing provided downward pressure to keep annual inflation from rising in Febrary.

BRC Shop Price Index y/y

March
5th, 2008

Actual

Forecast

Revised Form

1.3%

1.2%

N/A

For February
Provided by: British Retail Consortium

Retail Price Index y/y

February
12th, 2008

Actual

Forecast

Revised Form

4.1%

4.0%

N/A

For January
News Summary from Office of National Statistics

RPI m/m: -0.5%, forecast -0.5%, pr. 0.6%

"RPI inflation rose to 4.1 per cent in January, up from 4.0 per cent in December.

The main factors affecting the CPI also affected the RPI. Additionally, mortgage interest payments had a downward effect on RPI this month. RPIX inflation – the all items RPI excluding mortgage interest payments – was 3.4 per cent in January, up from 3.1 per cent in December."

BRC Shop Price Index y/y

February
6th, 2008

Actual

Forecast

Revised Form

1.2%

1.0%

N/A

January
Official Release from the British Retail Consortium

"Year-on-Year: The BRC-Nielsen Shop Price Index for January showed that shop prices were 1.2% higher than a year ago, up from 1.0% in December. Accelerating food price inflation and non-food prices continuing to fall, but at a slower rate, have produced this overall increase in shop prices. Food prices have been driven up by ambient goods where promotions finished after the festive period. In the non-food sector, heavy discounting, which started pre-Christmas to stimulate demand, came to an end, slowing the rate of deflation.

Month-on-Month: On a month-on-month basis prices fell by 0.5% between December and January, the first decrease in six months. A decrease in prices in the non-food sector, due to discounting in the traditional January sales, outweighed inflationary pressure coming from food which saw prices rise by 0.5% compared with November's 0.1% increase."

Retail Price Index y/y

January
15th, 2008

Actual

Forecast

Revised Form

4.0%

4.3%

N/A

For December.
News Summary from Office of National Statistics
RPI m/m: 0.6%, forecast 0.6%, pr. 0.4%.

RPI inflation slowed compared to the same time last year, with the year-over change falling to 4.0%. For the month retail prices saw an increase to 0.6% from November's 0.4%. Compared to last December, a downward contributor was mortgage payments. Travel and airfare prices increased prices. "Otherwise the main factors influencing the RPI were similar to those affecting the CPI."

BRC Shop Price Index y/y

January
9th, 2008

Actual

Forecast

Revised Form

1.0%

1.1%

N/A

For December.

Retail Price Index y/y

December
18th, 2007

Actual

Forecast

Revised Form

4.3%

4.2%

N/A

For November.
Official Release from National Statistics Office

The Retail price index increased 4.3% from a year ago, higher than expected, as increasing energy costs, combined with higher food prices added to upward pressure. RPI excluding mortgage interest payments was up 3.2% in November, higher than October's 3.1%.

BRC Shop Price Index y/y

December
5th, 2007

Actual

Forecast

Revised Form

1.1%

N/A

For November.

Retail Price Index y/y

November
13th, 2007

Actual

Forecast

Revised Form

4.2%

4.1%

3.9%

N/A

For October.
Office for National Statistics

RPI m/m: 0.4% (Oct), consensus 0.3%, pr. 0.3% (Sept).

The Retail Price Index saw its sharpest rise since June in annual terms, increasing 4.2% on the year.

BRC Shop Price Index y/y

November
7th, 2007

Actual

Forecast

Revised Form

1.1%

0.4%

N/A

For October.
Published by British Retail Consortium.

BRC Shop Price Index m/m: 0.5%, pr. 0.2% (Sept)

The year over year rise in prices to UK shops was measured at 1.1% in October. It is the strongest this year, and mostly led by increase to prices of food (3.7% (Oct), pr. 2.7% (Sept)). Non-food prices fell 0.2%.

Retail Price Index y/y

October
16th, 2007

Actual

Forecast

Revised Form

3.9%

4.0%

4.1%

N/A

September annual rate

Flat average mortgage interest payments was a drag to the RPI. On the month the rise was 0.3%, tamer than the 0.6% in August.

BRC Shop Price Index y/y

October
3rd, 2007

Actual

Forecast

Revised Form

0.4%

N/A

For September the annual inflation rate remained the same as August's, as shop prices increased 0.4% y/y. From August, prices increased 0.2% after being flat last month. The increase was led by food prices that grew 0.6% after dropping 0.1%. According to the BRC, ehe cost of fresh produce is rising but the transfer of these price increases have been limited to retailers.

As for the effects this has on tomorrow's BoE rate decisions, the BRC figures suggest inflation is not alarming and retailers and consumers would benefit from a rate cut. However, the bank has been very cautious since liquidity crunch and is expected to hold rates.

Retail Price Index y/y

September
18th, 2007

Actual

Forecast

Revised Form

4.1%

4.0%

3.8%

N/A

RPI inflation rose in August to 4.1%, up from 3.8% in July. The main catalyst for the increase was an increase in average mortgage interest payments, with lenders passing on July's quarter point increase in the Bank rate, according to the National Statistics Office.

BRC Shop Price Index y/y

September
5th, 2007

Actual

Forecast

Revised Form

0.4%

0.6%

N/A

The BRC Shop Price Index retreated in August from July's 0.6% y/y. Although overall inflation is tamed, food prices are increasing due to the summer flooding.

Retail Price Index y/y

July
17th, 2007

Actual

Forecast

Revised Form

4.4%

4.2%

4.3%

N/A

For the month of June, the RPI posted 0.5% increase after May's 0.4% increase. Inflation in the service sector was 0.3% on the month and 3.7% on the year, while goods inflation was 0.1% on the month and 1.4% on the year. The main upward pressure according the ONS came from mortgage interest payments.