UK retail sales increased by 0.7 percent in July, helped by warmer weather and the World Cup.
New figures from the Office for National Statistics (ONS) showed an increase in retail sales volumes 3.5 percent higher than a year earlier, above economists’ forecasts.
“Many consumers stayed away from some high street stores in July, but online sales were very strong, supported by several retailers launching promotions. Food sales remained robust as people continued to enjoy the World Cup and the sunshine,” said Rhian Murphy from the Office for National Statistics.
Andrew Wishart, a UK economist at the consultancy Capital Economics, said: “Of course, retail sales only account for about a third of total household spending, so the strength of spending on the high street could be offset by households reducing their outlay elsewhere.”
“That said, annual growth in retail sales and household spending have a reasonable relationship, and retail sales growth of 3.5 percent year on year in the three months to July is well above growth in consumer spending of just 1.1 percent in the second quarter.”
Following the news, the pound was up 0.24 percent against the dollar at $1.2727.
Hamish Muress, currency analyst at OFX, said: “The reaction from the pound… has been muted, suggesting that the wider view of the UK economy is still bleak. With the chances of a no-deal Brexit scenario high, wage growth shrinking and inflation rising, the Bank of England may find it difficult to follow through on any previous notions of further interest rate hikes in the future.”
“As long as this outlook remains, the pound will continue to be under sustained pressure,” he added.
Online sales also increased and reached a new record reaching a 15.3 percent increase in July. Online sales by department stores also increased by 35 percent.