- Naeem Aslam, chief market analyst at Avatrade Ltd.
UK retail sales increased in July, with low inflation and faster wage growth supporting consumer spending. Moreover, a recent rise in the Pound's value and a renewed drop in global oil prices have further helped consumers. The volumes of sales excluding fuel climbed 0.4% last month, according to the Office for National Statistics. From a year earlier, core retail sales surged 4.3% in the reported month. Including fuel, however, retail sales inched up 0.1% from June, while measured on an annual basis the gauge increased 4.2%, marking the 28th annual gain. The UK economy, which weakened in the first quarter of the year, relies heavily on consumer demand for robust growth. On top of that, the amount spent rose 1% in July compared with the previous year, but fell 0.2% from a month earlier.
A separate report showed total factory orders rose in August, while exports to European and overseas markets continue to falter due to a strong Pound. The overall balance of orders within the British manufacturing sector climbed in August to -1%, up from -10% in the prior month, according to the Confederation of British Industries. The report also suggested that manufacturing output is likely to keep its pace in the upcoming quarter, while export orders were subdued in August.
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