UK retail sales rose 0.5% in July By Reuters

LONDON (Reuters) – Britain’s retail sales rose 0.5 percent in July, official figures showed on Friday, after a weak performance in June – due to unusually cool and wet weather – weighed on economic growth.

The increase was in line with the forecasts of economists polled by Reuters.

Pressure on UK consumers from high inflation in 2022 and 2023 is starting to ease. Inflation returned to the 2% target in May and June and just slightly above it in July, while wage growth outpaced inflation by the largest margin since mid-2021 in the second quarter of the year.

The volume of retail sales in July was 1.4 percent higher than a year ago, the Office for National Statistics said, in line with the median forecast of economists in a Reuters poll.

Compared to February 2020, the last month before the start of the COVID-19 lockdowns, sales volumes are still 0.8% lower.

The Bank of England this month made the first cut in interest rates since their 16-year high.

Britain’s longest-running measure of consumer confidence rose to its highest level in nearly three years last month as shoppers said their finances had improved and they were more willing to make big purchases.

However, recent reports from UK retailers have been mixed. Clothing retailer Next reported better-than-expected second-quarter sales and raised its full-year profit outlook.

In contrast, luxury brand Burberry warned on profits and other UK retailers highlighted that consumer confidence in more discretionary purchases continued to be low.