Sunshine Boosts U.K. Consumption As Quarterly Retail Sales Rise
U.K. retail sales rebounded in the second quarter, climbing the most since 2013 as warm weather tempted shoppers, according to the British Retail Consortium.
Retail sales rose 2.1 percent from a year earlier on a like-for-like basis, the British Retail Consortium said Tuesday. Food sales jumped 3.6 percent, while non-food expenditure increased 0.9 percent.
While consumers have so far been a driver of growth since Britain’s vote to leave the European Union last year, the BRC data bucks a recent weakening trend. Shop sales plunged in May, according to the Office for National Statistics, and a report Monday by IHS Markit and Visa showed consumer spending posted its worst quarter since 2013 in the three months through June.
“The arrival of summer provided a welcome pickup to sales growth in June,” said BRC Chief Executive Helen Dickinson. “There’s a question mark over whether this spending momentum will last, as household expenditure is increasingly squeezed from rising inflation and slowing wage growth.”
Despite the pickup, the U.K. economy grew a “sluggish” 0.3 percent in the second quarter, according to estimates by PricewaterhouseCoopers LLP.
“While retail sales growth has been somewhat stronger than in the first quarter, this is offset by slower estimated growth in transport, industrial production and construction,” said Chief Economist John Hawksworth.
PwC’s estimate are based on its “nowcasting” model, which it says combines human judgment with artificial intelligence machine learning techniques, and has an accuracy of 94 percent in predicting changes in direction of growth the past four years.
The ONS will publish the first official reading of gross domestic product for the quarter on July 26.