British retailers reported an unexpected rise in sales in July, and much higher sales than previously thought in June, data showed on Thursday, boosting hopes that the UK's recession may not be as deep as feared.
Retail sales volumes rose 0.3pc on the month - compared to economists' forecasts for a monthly fall of 0.1pc, the Office for National Statistics said.
The ONS revised sales growth in June to 0.8pc from a previously reported rise of 0.1pc, reducing the overall decline in retail sales in the second quarter to just 0.3pc versus the previous three months.
Food retailers saw a 0.4pc increase in sales volumes in July although non-food stores continued to suffer, with volumes down 1.8pc on the previous month.
The strong growth of internet sales continued, with sales up 14pc on the previous year to over £500m. The internet now accounts for 8.5pc of all retail sales excluding fuel. Philip Shaw, chief economist at Investec, said: "Overall they're better than expected.
If you take into account the substantial upward revision in June, it does leave high street spending more robust than previously thought.
"We'll obviously get any Olympic effect in next month's data but for the time being the high street numbers are on the upside of expectations."
The ONS estimated last month that the economy shrank by 0.7pc between April and June, partly based on the assumption that construction output fell by 5.2pc over the quarter. Since then the ONS has said that construction output actually fell by 3.9pc in the second quarter.
The construction data alone would suggest a 0.1 percentage point upward revision in GDP. In the three months through July, retail sales growth picked up to 0.9pc compared to the previous three-month period.
Retailers have been hoping that visitors of the London Olympics and a morale boost from the success of the country's athletes will have lifted sales, though there has been no broad-based evidence of that yet.
The ONS said on Thursday that retailers reported no impact from the first two days of the Games covered in the July release.
Recent economic data have been mixed, and many Britons have seen their budgets squeezed, as higher taxes and rising prices eat up meagre wage increases.
On Tuesday, the ONS reported an unexpected rise in inflation last month, damaging hopes that slowing price pressures would ease the squeeze on Britons' finances and allow them to spend more.
On Wednesday, data showed that the number of Britons out of work fell to the lowest level in nearly a year.
The “Olympics effect” has likely boosted hiring in the capital but employers also created 130,000 full-time jobs nationwide, the figures showed. The UK is only 100,000 jobs off its pre-recession employment peak.
telegraph.co.uk
Retail sales volumes rose 0.3pc on the month - compared to economists' forecasts for a monthly fall of 0.1pc, the Office for National Statistics said.
The ONS revised sales growth in June to 0.8pc from a previously reported rise of 0.1pc, reducing the overall decline in retail sales in the second quarter to just 0.3pc versus the previous three months.
Food retailers saw a 0.4pc increase in sales volumes in July although non-food stores continued to suffer, with volumes down 1.8pc on the previous month.
The strong growth of internet sales continued, with sales up 14pc on the previous year to over £500m. The internet now accounts for 8.5pc of all retail sales excluding fuel. Philip Shaw, chief economist at Investec, said: "Overall they're better than expected.
If you take into account the substantial upward revision in June, it does leave high street spending more robust than previously thought.
"We'll obviously get any Olympic effect in next month's data but for the time being the high street numbers are on the upside of expectations."
The ONS estimated last month that the economy shrank by 0.7pc between April and June, partly based on the assumption that construction output fell by 5.2pc over the quarter. Since then the ONS has said that construction output actually fell by 3.9pc in the second quarter.
The construction data alone would suggest a 0.1 percentage point upward revision in GDP. In the three months through July, retail sales growth picked up to 0.9pc compared to the previous three-month period.
Retailers have been hoping that visitors of the London Olympics and a morale boost from the success of the country's athletes will have lifted sales, though there has been no broad-based evidence of that yet.
The ONS said on Thursday that retailers reported no impact from the first two days of the Games covered in the July release.
Recent economic data have been mixed, and many Britons have seen their budgets squeezed, as higher taxes and rising prices eat up meagre wage increases.
On Tuesday, the ONS reported an unexpected rise in inflation last month, damaging hopes that slowing price pressures would ease the squeeze on Britons' finances and allow them to spend more.
On Wednesday, data showed that the number of Britons out of work fell to the lowest level in nearly a year.
The “Olympics effect” has likely boosted hiring in the capital but employers also created 130,000 full-time jobs nationwide, the figures showed. The UK is only 100,000 jobs off its pre-recession employment peak.
telegraph.co.uk
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