U.K. Retail Sales Rise by 0.3% in July – ONS
2022.08.19 10:25
By Scott Kanowsky
Investing.com — U.K. retail sales unexpectedly grew slightly in July compared to the prior month, recovering from two previous monthly declines, as a surge in online shopping outweighed a heatwave-driven slide in car fuel demand.
Retail sales volumes rose by 0.3%, according to data from the U.K. Office for National Statistics, following downwardly revised falls of 0.2% in June and 0.8% in May. Economists had expected the monthly figure to contract by 0.2%.
Non-store retailing, particularly from online stores, saw a 4.8% jump in sales. Feedback from these businesses suggested that a range of promotions helped boost consumer spending, the ONS said.
The uptick helped offset a drop in automotive fuel sales by 0.9%. The ONS added that “anecdotal evidence” showed that a recent string of hot weather across Britain may have reduced travel and, in turn, gas purchases.
Overall, sales remained above their pre-pandemic levels, but lower over the past year. Volumes were down by 3.4% on an annualized basis in July from a 6.1% slide in June, hinting at a wider downturn in consumer spending as living costs soar.
Friday’s numbers come after research from data provider GfK showed that U.K. consumer confidence slumped to its lowest level since records first started to be kept about half a century ago. The August reading from GfK’s consumer confidence index fell to minus 44, below the previous monthly mark of minus 41.
The decline suggests widespread pessimism about the state of the U.K.’s economy. Consumers are reining in major purchases as they fret over several dark economic clouds ahead, including the first double-digit annual increase in prices since 1982 in July.
Earlier this month, the Bank of England raised interest rates by 50 basis points – its largest hike since 1995 – in a bid to cool down red-hot inflation. Traders now predict that borrowing costs will double over the next six months as the BoE steps up its campaign to get price growth back down to its 2% target.
