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UK retail sales rebounded in July thanks to higher spending at department stores and sporting goods after wet weather discouraged shoppers at the start of the summer.
The volume of goods purchased in the UK rose by 0.5 per cent in the June-July period, after falling by 0.9 per cent in the previous month, Office for National Statistics said on Friday.
The statistics agency had initially estimated a 1.2 percent decline between May and June, as rain kept shoppers away from the high street. The July figure was in line with analysts’ expectations.
Recovery in retail “led by a rise in department stores and sports equipment stores”, with “both the euro and discounting… boosting sales”, said Liz McKeown, ONS director of economic statistics.
Department stores recorded a 4 percent increase for the month, while sales at sporting goods, games and toy stores rose 3.5 percent.
But sales at clothing and home goods stores fell 0.6 percent. Fuel sales fell 1.9 percent, despite lower gasoline prices.
Alex Kerr, an economist at consultancy Capital Economics, said that although sales growth in July was “not particularly broad-based” it would continue to rise as “lower inflation continues to support real incomes and bolster consumer confidence”.
Retail sales rose 0.5 percent, showing consumers are returning to spending after a surge inflationary and rising interest rates over the past three years have forced them to cut.
Consumer spending is a key part of overall UK economic activity and Friday’s figures come at the end of a week full of important data. economic growthinflation and wage growth.
Figures from the ONS showed economic growth remained strong in the three months to June, following a solid recovery in the first quarter from last year’s technical recession.
The rise in inflation from 2 percent to 2.2 percent in July lower than expected, mainly due to a sharp slowdown in service price growth, paving the way for the Bank of England to cut interest rates further this year.
Meanwhile, wage growth hit its lowest annual rate in nearly two years in the three months to June.
Retail sales rose 1.1 percent in the three months to July from the previous three months, a less volatile figure than the monthly rate.
Kien Tan, senior retail consultant at consultancy PwC UK, said temperatures had been unusually cool in the first half of July and better weather in August would ultimately “better news for the grocery and fashion industries”.
““A more favourable economic backdrop with higher wages, lower inflation and lower interest rates signals more generous spending in the run-up to Christmas,” he added.
Purchases of goods in July remained 0.8% below pre-pandemic levels in February 2020, although households spent about 19% more, reflecting the impact of high inflation on purchasing power.
Charlie Huggins at investment broker Wealth Club said the retail sales figures showed the UK economy was “stabilising”, with few signs that consumers would cut back significantly on spending.
“With inflation easing, paving the way for further rate cuts, retailers can look forward to the rest of the year with some degree of optimism,” he added.
