UK retail sales rise unexpectedly in July
By Michele Maatouk
Date: Thursday 15 Aug 2019
(Sharecast News) - UK retail sales unexpectedly rose in July, according to data released on Thursday by the Office for National Statistics.
Retail sales ticked up 0.2% last month, down from a 0.9% increase in June but ahead of expectations for a 0.2% decline.
On the year, retail sales rose 3.3%, down from 3.8% growth in June but beating expectations for a 2.6% jump.
Non-store sales, such as online sales, rose 6.9% in July and were up 12.7% on the year. Meanwhile, department store sales were up 1.6%, having fallen in the previous six months.
ONS head of retail sales Rhian Murphy said: "Retail sales saw only modest growth in the latest three months.
"Although still declining across the quarter, there was an increase in sales for department stores in July for the first time this year. Strong online sales growth on the month was driven by promotions."
David Cheetham, chief market analyst at XTB, said: "The UK consumer continues to show impressive resilience to the slowing economy and political uncertainty with retail sales figures for July topping estimates. This is the sixth time this year that monthly figures have been better than expected, with strong growth of 6.9% seen in non-store retailing.
"Another bright spot was department stores where growth increased for the first time in 2019 after six consecutive monthly declines. There's been a little uptick seen in the pound after the release, but as was the case for yesterday's inflation figures and Tuesday's wage numbers, at present economic data remains of secondary importance for sterling."
Capital Economics economist Gabriella Dickens said: "The rise in retail sales in July was encouraging and supports our view that the economy has picked up in Q3 after contracting by 0.2% q/q in Q2.
"Of course, the retail sector only makes up about 30% of total household spending. But spending growth off the high street appears to have remained fairly steady. So July's figures leave us more confident that the economy avoided another contraction in Q3. As ever, the outlook further ahead depends on what happens with Brexit.
"If there is a no deal Brexit, consumer spending growth would probably fall. But wage growth rose to an 11-year high in June, inflation remained close to the Bank of England's 2% target and jobs growth was still buoyant. So there isn't a no deal, we see no reason why household spending shouldn't remain one of the strongest parts if the economy."
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