UK retail sales surprisingly grew in October, proving the strength of the country’s economy. This confirms the solid condition after the decision of British voters to leave the European Union. Retail sales increased by 1.9% mom in October due mainly to purchases of clothing, according to the data of the National Statistics Office. The economists expected quite more conservative growth of only 0.5% mom.
The consumers were not particularly worried about the uncertainties about the exit of Britain from the EU, particularly given the fact that official talks between London and Brussels have not yet started. Many analysts expected household spending to influence negotiations for Brexit, but like yesterday’s unemployment data, it seems Brexit not a factor to put pressure on costs now
The average weekly cost even reported a peak for the year in October, supported by sales of Halloween in supermarkets and lower temperatures promoting sales of clothing.
Many analysts, however, warn of the adverse effect on the British economy in the process of Brexit next year as companies do not seem so reluctant to invest because of the uncertainties associated with this unprecedented exit from the Community.
The consumers may also suffer from the expected substantial increase in inflation due to the weakening of the pound as a result of Brexit. Analysts point out that wages may not be able to follow the pace of increase in consumer prices, which according to the British Central Bank will reach 2.8% on an annual basis at the end of 2017.
Because of these risks it is possible Finance Minister Philip Hammond to include in the revised budget, expected next Wednesday, measures to support the poorest families.
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