"Consumer spending habits have not fallen as sharply following the referendum as had been forecast by some. That being the case, retailers will be hoping that the current good weather holds, and that the feel-good factor being created by the Olympics translates to further spending on food and drink and Games-related merchandise".
- Paul Morales, Lloyds Bank Commercial Banking
Britain's retail sales rose more than expected last month, fresh data from the UK Office for National Statistics revealed on Thursday. The volume of sales increased 1.4% on a monthly seasonally adjusted basis in July, compared to the 0.9% fall see in the previous month, while markets anticipated an increase of 0.1% in the reported month. Year-over-year, retail sales jumped 5.9% in the same month, following June's 4.3% rise and surpassing the 4.1% market forecast. Excluding auto fuel, retail sales grew 1.5% month-over-month in July, up from the 0.9% drop registered in June, whereas economic desks pencilled in a slight increase of 0.1%. On a yearly basis, core retail sales advanced 5.4% in the seventh month of the year, after rising just 3.9% in the preceding month, while analysts expected UK core retail sales to climb 3.6% in July. All sectors posted sales growth in July; however, the majority of the sales growth came from non-food stores rather than supermarkets.
The data covered the four-week period from July 3 to 30 after the United Kingdom voted to leave the European Union; however, analysts suggest that the reaction of the economy may be delayed by a couple of months. Moreover, they assume that the sales growth was driven mainly by the weaker Pound. Following the release, the British Pound jumped 0.4% against the US Dollar and 0.2% against the Euro.
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