Sun shines on the retail sector
ONS report shows better-than-expected retail sales figures for June
by Abi Moses on 21st July, 2017
A report released by the Office for National Statistics (ONS) showed better-than-expected retail sales figures for June, with the sunny weather thought to be a major contributing factor to the boosted figures.
After disappointing sales figures in May reported a 1% dip, June saw a retail fight-back with a 0.6% upturn.
With Brexit believed to be impacting wage growth causing a squeeze on household budgets, there were concerns that consumer spending would suffer. June's sales figures are therefore, a welcomed boost for the industry.
Kate Davies, a senior statistician at the ONS, said "Today's retail sales figures show overall growth. A particularly warm June seems to have prompted strong sales in clothing, which has compensated for a decline in food and fuel sales for the month. Looking at the quarterly data, the underlying trend as suggested by the three-month on three-month movement is one of growth, following a fall in quarter one, suggesting a relatively flat first half of 2017."
Continued consumer spending growth could tempt the Bank of England to consider an interest rate hike, with support growing in favour of a rate hike within the BoE.
However, Paul Hollingsworth, a UK economist at Capital Economics, said "We shouldn't get too carried away by these figures. After all, the retail sales figures are very volatile on a month-by-month basis and the heatwave in June provided a boost to clothing sales that may not be sustained. Nonetheless, the fact that growth in sales values also accelerated in June suggests that households are not tightening their belts in response to higher inflation or Brexit uncertainty.
Mr Hollingsworth continued, "All in all, then, after a string of more downbeat news recently, today's figures provide welcome support for our view that the economy should maintain a decent amount of momentum over the coming quarters."
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