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Retail sales recovery expected to lose a bit of steam

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Friday is a big day for UK economic indicators, with updates on consumer confidence, retail sales and purchasing managers indices (PMIs).

The GfK consumer confidence index is expected to improve to a reading of -12 in May from April’s -15.

Economists have pencilled in a figure of 4.5% for the growth in UK retail sales in April, which would represent a slowdown in growth from March’s 5.4% increase. Year-on-year comparisons are not very meaningful given that in April 2020 the UK was in the depths of its most severe lockdown but for posterity’s sake, forecasts are for a 36.5% increase, compared to a 7.2% increase in March.

Excluding fuel sales, the month-on-month increase is also expected to be 4.5%, down from a 4.9% increase in March. The annual increase is seen accelerating to 32.0% from 7.9% the month before.

The preliminary manufacturing (services) PMI is expected to ease to 60.7 from 60.9 in March, while the composite PMI is tipped to improve to 62.0 from 60.7 in March.

As for company news, Close Brothers Group PLC (LON:CBG) has been in its counting-house, counting up its money ahead of its fiscal third-quarter update.

“Bad debts have stayed under control so far and Close have reported some encouraging lending data up to now. The market will be hoping to see lending accelerating with muted levels of competition at this stage of the cycle. The future path of bad debts will be important, especially with furlough schemes heading toward an end,” said Steve Clayton, the fund manager of the Hargreaves Lansdown Select Fund.

Significant announcements expected

Trading announcements: Close Brothers Group PLC (LON:CBG)

Finals: Investec PLC (LON:INVP)

Interims: Electra Private Equity PLC (LON:ELTA)

Economic data: UK consumer confidence, UK retail sales, UK flash PMIs, US flash PMIs 

 

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