Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Retail sales fell in July after a bumper period the previous month, despite the World Cup luring and the hot weather boosting alcoholic drink sales in supermarkets. The total volume of goods sold in stores and online fell 0.5% in July, according to the Office for National Statistics (ONS), compared with a 1% rise in June.
The drop was partly down to non-food sales dropping back in July, after British retailers had brought promotions forward to June because of the hot weather. The ONS said there was “evidence of reduced promotions in July” among household goods and clothing retailers. But shops selling alcoholic drinks and beverages “performed well, which they attributed to promotions, the hot weather, and the World Cup,” it said.
Retail sales increased in the latest three months, with all main sectors, apart from motor fuel, seeing growth. Some retailers told us that hot weather and promotions helped sales of outdoor products and items such as fans, with clothing and online sports merchandise also doing well. The figures come after UK consumer confidence jumped to a two-year high last month, according to a closely followed monitor.
That is despite tensions in Iran flaring up again and a jump in energy bills last month making a dent in consumer finances. GfK’s Consumer Confidence Index rose to -14 from -17 in July, but with inflation rising again and ongoing uncertainty in the Middle East, “there are still many challenges ahead that will test the mettle of UK consumers,” said Neil Bellamy, consumer insights director at GfK. Elsewhere, oil prices were at one-month highs amid the ongoing deadlock between the US and Iran.
Brent crude was at $93.42 a barrel, 0.38% down for the day but still trading higher than at the start of the week. Asian share indices were mixed on Friday as stress in global bond markets showed little sign of abating. Japan’s Nikkei index was down 0.53%, although South Korea’s Kospi was up 0.87% and Hong Kong’s Hang Seng was up 0.92%.
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