UK retail sales grew in July 2016, supported by hot weather and weaker currency. The retail sales in UK rose by 5.9% yoy and 1.4% MoM, according to the National Statistics Office. Sales of watches and jewelery increased by 16.6% yoy, reporting the biggest jump in almost two years.
Data on retail trade were in contradiction with the expectations for an immediate impact on consumer confidence after the Brexit referendum. Other data presented earlier this week also showed a weak immediate effect of the Brexit referendum on the labor market. There are signs, however, for upside inflationary pressures after the collapse of the GBP, which could reduce the purchasing power of households.
Retailers certainly have not made such a big impact, as many predicted once Brexit, but they still feel fear about what lies ahead in the next few months. The government will still be celebrated as it needs more evidence that consumers continue to reach for their wallets until the effects of Brexit become clearer.
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