Shoppers shrug off Brexit as retail sales jump in July

Shoppers in Britain shrugged off June's shock Brexit vote as retail sales jumped by much more than expected last month, official data showed.

Warm weather boosted clothes sales and the pound’s plunge tempted overseas buyers to splash out on luxury items such as watches and jewellery.

Thursday's figures represent the first official data to shed light on how consumer demand has performed since the unexpected decision by voters to leave the European Union in the June 23rd referendum.

Data released earlier this week also showed little immediate impact of the Brexit vote on the labour market but there were signs of inflation pressures building after the plunge in sterling, which could eat into the spending power of households going forward.

Retail sales

Retail sales volumes surged 1.4 per cent in July compared with June, the Office for National Statistics (ONS) said, topping all forecasts in a Reuters poll that pointed to a much smaller rise of 0.2 per cent.

“Better weather this year could be a major factor with sales of clothing and footwear doing particularly well,” said Joe Grice, chief economic adviser at the ONS.

“There is also anecdotal evidence from respondents suggesting the weaker pound has encouraged overseas visitors to spend.”

Sales of watches and jewellery were up 16.6 per cent in July compared with the same month last year – the biggest jump in nearly two years.

The ONS retail sales figures are volatile and Bank of England policymakers will want to see more than one month’s data before drawing firm conclusions about the health of consumer spending - a key pillar of British economic recently.

– (Reuters)