Surprise upturn in retail sales eases worries over recession
UK shop sales contrasted with a downturn in Scotland (pic: Terry Murden)
A surprise uptick in UK retail sales helped ease market worries of a recession but there were more sharp falls on equity markets.
Retail volumes rose 0.2% month-on-month against expectations of a 0.2% fall. An even bigger surprise was that department store sales increased for the first time this year with a month-on-month growth of 1.6%.
However, food store sales were down by 0.5%, compared with the same month last year and Rhian Murphy, head of retail sales at the ONS, added a note of caution, saying: “Retail sales saw only modest growth in the last three months.”
Even so, Howard Archer of EY said the figures provided hope that the economy can return to growth in Q3.
Capital Economics assistant economist Gabriella Dickens said: “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 the third quarter.”
The figures contrast with gloomier data yesterday showing total sales in Scotland in July decreased by 0.3%.
The FTSE 100 closed 80.87 points or 1.13% lower at 7067.01.
Top of the losers was Royal Bank of Scotland, which fell 10.48% to 177.65p after analysts at both Macquarie and Goldman Sachs lowered their forecasts for its shares.
The Nikkei clawed back some earlier falls to close 1.2% down at 20,405.65, while Hong Kong’s Hang Seng ended the day 0.89% higher at 25,526.49.