In July, UK retail sales experienced a resurgence driven by summer promotions and the Euros football tournament, leading to increased spending at department stores and sports shops.
According to the Office for National Statistics (ONS), the volume of goods sold in both stores and online platforms rose by 0.5% in July, following a revised decrease of 0.9% in the prior month. While economists had anticipated a 0.6% increase, the decline in June was less severe than the initially reported 1.2%.
These figures indicate a promising start to the third quarter, contrasting with subdued spending in June that had restrained overall economic activity. The data also suggests growing confidence that the peak of the cost-of-living pressure has passed, as inflation nears the Bank of England’s target of 2% and companies are hiring at the most robust pace since November.
Charlie Huggins, Manager of the quality shares portfolio at Wealth Club, noted, “The UK economy seems to be progressing steadily, with consumers showing minimal signs of scaling back significantly. With inflation easing and potential for further interest rate reductions, retailers can anticipate the latter part of the year with a sense of positivity.”
Meanwhile, investors anticipate that the Bank of England will implement at least one more interest rate cut this year, following the recent reduction on Aug. 1 from the highest level in 16 years.
