August 21, 2024
UK retail sales rose 0.5% in July over the month against falling 0.9% in June and gained 1.4% over the year. 3-month moving average posted +0.76% increase in July demonstrating an attempt to build an upward movement that started in May (see chart).
Yearly indicator dived with the advent of monetary policy tightening to as low as -7.1 in December 2022. Since then, it has been creeping slowly upward (see chart). It has been making few attempts to overcome negative readings since November 2023 (see chart), however, with little success.
Today’s figures provide some hope this time such positive dynamic will hold on. As inflation returned to normal level and wages demonstrate record rise consumers are getting more confident and increase their spending helping the economy to grow decently in the first half of the year. Reviving consumer spending will allow BoE not to rush with rate cuts and instead to choose more moderate approach in easing monetary policy.
⭐️Summary:
Retail sales rose in July providing some hope this tendency will go on. Together with other data pointing to price pressure subsiding and the economy going on the rise it will help BoE to stick to more accommodative approach in setting monetary policy.