Comments: Retail sales - down but definitely not out

So the underlying strength is

Retail sales down
Underlying Price Increases Up

Hhmmmmm

Posted by assetpriceinflation at May 18, 2007 10:00 AM

So, sales down but prices up? Seems to indicate to me that perhaps the MPC's assertation that retailers may have rediscovered their pricing power is wide of the mark, and the real explanation is increased operating costs (energy to run stores) and higher commodity costs for suppliers pushing up wholesale prices. If that's the case, the MPC has a lot less control over inflation than it has previously thought.

Posted by Minh at May 18, 2007 10:46 AM

I think what the ONS means by underlying strength is the increase over the latest three months. They're always reluctant to pronounce on a single month, particular when it includes Easter, when seasonal adjustments are tricky.

You're right in one sense about whether the Bank has control over it - the biggest increases are in food prices, which Mervyn King was at pains to point out may be climate-related.

Posted by David Smith at May 18, 2007 11:01 AM

I'm not a big shopper, but I notice there are been a large increase in the price of onions!

Posted by Caravaggio at May 18, 2007 12:54 PM
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