Retail sales held up well in August following a strong July – yet another piece of evidence which shows the economy has fared better than expected since June’s referendum.
Furthermore, July’s figure was revised upwards to 1.9 percent, marking the strongest July in 14 years. Sales fell just 0.2 percent between July and August, a much smaller drop than the expected 0.5 percent. Year-on-year growth came in at 6.2 percent, again beating expectations of 5.3 percent. The vote to leave the EU appears to have had little to no effect on consumers’ willingness to spend, and the underlying trend in UK retail sales remains one of robust growth.
Surveys in the immediate aftermath of the referendum showed a sharp dip in consumer confidence, leading to predictions of weak sales over the coming months. However, the post-referendum landscape has been characterised by surveys forecasting a sharp weakening of activity, which have thus far failed to appear in the hard data.
Today’s figures show that, so far at least, it appears to be business as usual for the UK consumer. The Bank of England releases its latest policy decision at noon. No change is expected, but the accompanying minutes will be closely scrutinised for policymakers’ latest thoughts.