Robust U.K. Retail Sales Could Play into BOE's Inflation Fears
Dow Jones09-18 22:47
1447 GMT - The rebound in British retail sales in August could raise inflationary worries for the Bank of England, RSM U.K. chief economist Thomas Pugh says in a note. Sales rose 0.5% on month in August despite rising oil prices. That is a good sign growth isn't going to fall off a cliff in the third quarter, he says. But the BOE Thursday warned if demand continues to hold up in the face of higher energy prices, it will make it easier for firms to pass on rising input costs to consumers. "Today's retail sales data will play into that fear," Pugh notes. That dynamic would push up inflation, making an interest-rate hike more likely later this year, he says.
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