Retail sales rise in July points to stronger UK economy

Rinoa

http://www.bbc.co.uk/news/business-19280003

UK retail sales rose 0.3% in July from the previous month according to official figures, suggesting the recession may not be as deep as initially thought.
Sales volumes in the month were up 2.8% compared with a year earlier.

The Office for National Statistics (ONS) also revised up figures for June to a rise of 0.8% from 0.1%.
Earlier estimates that the economy shrank 0.7% in the June quarter are now thought to be overly pessimistic.

Stronger rises in factory output and the construction sector together with continued falls in unemployment could mean national income as measured by gross domestic product (GDP) is not shrinking as quickly as initially thought.
Official GDP figures are now expected to be revised to reflect a less severe recession.

"I think it supports what the Bank of England's been saying that as real incomes start to improve because of lower inflation and possibly eventually higher wages, you might start to see the retail sector show some signs of improvement," said George Buckley of Deutsche Bank.
Shops and internet retailers continued to cut prices, which helped encourage shoppers to spend more last month.
Fuel sales rose 2.6% compared with June driven by lower prices and supermarket promotions.
Food sales rose 0.4%, while sales of clothing and footwear fell 1.8%.

Amit Kara of UBS said: "The data shows that's been a widespread pick-up in volume growth across most of the sectors... and of course this is all coming before the boost we're likely to get from the Olympics.

"As such, it's consistent with the view that Q3 will be a lot better for overall economic growth in the UK."

Excellent news.

the_flying_pig

small point of order re: this quote

" real incomes start to improve because of lower inflation and possibly eventually higher wages"

without higher wages you need deflation for real incomes to fall. "lower inflation" simply means that real incomes start to fall more slowly than before.

JonnyBravo

the_flying_pig wrote: »

without higher wages you need deflation for real incomes to [STRIKE]fall[/STRIKE] rise. "lower inflation" simply means that real incomes start to fall more slowly than before.

Let me help. It's "one of those days"
You're not related to abaxas are you?

abaxas

JonnyBravo wrote: »

Let me help. It's "one of those days"
You're not related to abaxas are you?

Who knows, but we are all related in the 'make the world a happier place' clan. :P

the_flying_pig

JonnyBravo wrote: »

Let me help. It's "one of those days"
You're not related to abaxas are you?

pedant.pedant.pedant.

[i only wanted to say once but fell foul of the 10 character minimum rule]

crash123

"Shops and internet retailers continued to cut prices, which helped encourage shoppers to spend more last month."
Who would have thought it, cutting prices encouraging sales.

JonnyBravo

the_flying_pig wrote: »

pedant.pedant.pedant.

[i only wanted to say once but fell foul of the 10 character minimum rule]

I know, I know, I know.
Whether it's abaxas overstating BTL repossessions by a measly 400ish% or you stating the direct opposite of what is true.
Such minor fluctuations and discrepancies really are immaterial.

StevieJ

I thought the BBC didn't publish 'good news' under a Tory govt

Mrs_Bones

I spent more last month. I went clothes shopping something I rarely do but due to the lousy weather all the sales were started early so I stocked up with a few summer clothes at over 75% off. My cousin also did a bit of bargain hunting and got a new patio set with over 60% off. That's just my little anecdote but I don't imagine we were the only ones taking advantage of the early sales.

The problem is that if the things had been full price neither me or my cousin would have been inclined to open our purse. People are still looking for bargains and trying to make their money stretch further, the sales starting early would have given the retail figures a boost last month. With the Olympics which should have given some boost and with back to school season coming up, the figures should remain on an upward trend for another month or two at least.

The debate is whether that can be maintained over the main retail period of Christmas. I'm not sure it will be as confidence is still low. The holiday sales will have to start early again to encourage consumers to open their purses. People I know are simple not ordering the stock quantities of previous years as their expectations are low.

Generali

Rinoa wrote: »

http://www.bbc.co.uk/news/business-19280003

Excellent news.

That revision in retail sales alone should increase GDP growth by somewhere around 0.2 percentage points.

Loughton_Monkey

Generali wrote: »

That revision in retail sales alone should increase GDP growth by somewhere around 0.2 percentage points.

So end of recession then!

I think we should all start taking Valium to deal with all the "shocks" we keep getting.

Firstly we had the "Shock" -0.7% GDP fall in June. Then we had the "Shock" fall in Unemployment. Now we get the "Shock" rise in Retail Sales.

This is truly shocking.

So shocking, that I am starting to prepare for the shock of coming out of recession in Q3.