Retail sales volumes in July were 1.4% higher than a year ago, the Office for National Statistics said, in line with economists’ median forecast in a Reuters poll….reports Asian Lite News
British retail sales rose 0.5% in July, official figures showed on Friday, after a weak performance in June – due partly to unusually cool and wet weather – weighed on economic growth.
The squeeze on British consumers from high inflation in 2022 and 2023 is beginning to ease. Inflation was back at its 2% target in May and June, and only slightly above that in July, while wage growth exceeded inflation by the highest margin since mid-2021 in the second quarter of the year.
Retail sales volumes in July were 1.4% higher than a year ago, the Office for National Statistics said, in line with economists’ median forecast in a Reuters poll.
Compared with February 2020, the last month before COVID-19 lockdowns started, sales volumes are still 0.8% lower. The Bank of England this month made a first cut to interest rates from their 16-year high.
Britain’s longest-running consumer confidence measure rose to its highest in nearly three years last month as shoppers said their finances had improved and they were more willing to make big purchases. However, recent reports from UK retailers have been mixed.
Clothing retailer Next reported better-than-expected second-quarter sales and raised its full-year profit outlook. By contrast, luxury brand Burberry warned on profit and other UK retailers have highlighted continuing low consumer confidence around more discretionary purchases.
Earlier this week, UK’s inflation rate has risen for the first time this year, official figures showed. Overall prices rose by 2.2% in the year to July, slightly above the Bank of England’s target of 2% where the rate had been since May.
A rise was widely predicted and is due to prices of gas and electricity falling by less than they did a year before. The increase is also less than many economists had expected.
The latest figures mean that prices are now rising faster across the UK than in previous months, but still at a slower pace than in 2022 and 2023 when households were hit especially hard by higher energy and food bills.
The Bank of England expects inflation – which measures the rate at which prices rise – to go up to 2.75% in the coming months before falling below 2% next year.
Another set of inflation figures, as well as employment and wages data, will be released before its next rate-setting meeting on 19 September.
The Bank had put up interest rates to tackle soaring inflation but last month cut them to 5% from 5.25% – the first reduction since the start of the pandemic.
Higher rates can be good for savers but may drive up the cost of mortgages and other loans for consumers.
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