UK retail sales growth strongest since 2004 | The Daily Star
12:00 AM, July 20, 2018 / LAST MODIFIED: 12:00 AM, July 20, 2018

UK retail sales growth strongest since 2004

British retail sales rose the most in over a decade in the second quarter despite a drop in spending in June, official data showed on Thursday, giving the Bank of England some reassurance shoppers have largely shaken off a sluggish start to 2018.

Retail sales volumes in June alone were down 0.5 percent from May - at the low end of economists' forecasts in a Reuters poll - as the World Cup kept some shoppers out of stores after extremely rapid growth during the previous two months.

for the second quarter as a whole were 2.1 percent higher than the first three months of the year, the biggest calendar-quarter increase since the first quarter of 2004.

But financial markets honed in on the weaker June figure, which pushed sterling below $1.30 for the first time since September 2017, after a week in which the British currency has been battered by political disputes over Brexit.

“An August rate hike is in the balance. Whether or not one is delivered, the trajectory thereafter will be extremely shallow,” said Tom Stevens, an investment director at fund manager Fidelity International.

Most economists polled by Reuters at the start of the week predicted that the BoE would raise rates on Aug. 2 for only the second time since the financial crisis.

But the dip in sales in June - which follows soft wage growth and inflation figures earlier in the week - revived some investors' concerns that they may see a repeat of May, when the BoE held off a widely expected rate rise due to a string of soft data in the run-up to its policy meeting.

Retail sales growth and Britain's economy overall slowed in the first three months of 2018, due to heavy snow as well as ongoing pressures from high inflation and the anticipation of next year's Brexit, and the BoE said in May it would delay raising rates until it was sure that growth was back on track.

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