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Unruffled.

Shoppers in Britain showed no adverse effects from the UK’s decision to leave the EU in July, heading out to the shops to produce the best month for retail sales since April.

Here’s a roundup of what economists make of it all.

Ruth Gregory at Capital Economics says today’s stellar numbers suggest no “material collapse” in spending is nigh for the UK. Although consumers are likely to refrain from any splurges in the coming months, decent economic fundamentals suggest a slowdown rather than a crash:

This relative resilience in spending is not too surprising since the fundamentals – such as low interest rates, inflation and a strong jobs market – remain supportive.

But we would be wary about reading too much into the jump in July’s figures. The month-on-month data tend to be fairly volatile and temporary factors such as July’s warm weather seems to have boosted spending.

Meanwhile, it will probably take some time before we see the full effect on the consumer of a weaker labour market and an increase in prices. So it would be fairly surprising if household spending growth didn’t slow at all in the aftermath of the leave vote.

Don’t expect the buoyant retail sales numbers to last, says a more downbeat Samuel Tombs at Pantheon, who notes the figures won’t tell us much on whether or not the UK could fall into recession:

With firms intending to stop hiring and inflation set to soar, the high street is set for a tough year. Sales volumes rose in all major categories, although the 3.5% leap in clothing sales clearly reflected a rebound from weakness in June due to heavy rainfall. Retailers also had to continue to cut prices rapidly—the retail sales deflator, excluding fuel, fell 1.7% year-over-year—in order to get consumers to open their wallets.

July’s retail sales numbers do not have much impact on whether the economy will enter recession. Retail spending equates to about 20% of GDP, but since the vast bulk of goods are imported, surging high street spending does little to boost GDP growth. The real test for consumer spending lies in 2017 when jobs cuts will kick in and inflation will erode spending power.

Howard Archer at IHS says the spending outlook will be determined by the future path of inflation and earnings:

The concern remains that the fundamentals for consumers will soften appreciably over the coming months, thereby weighing down on spending. Consumers are likely to face less favourable purchasing power as inflation rises and earnings growth is limited by companies striving to limit their costs. In addition, unemployment seems seem likely to rise over the coming months.

Robust retail sales appear to confirm evidence from household spending surveys, where respondents have reported lower confidence but said they would not be delaying purchases, adds Sam Alderson at the Centre for Economics and Business Research.

Anna Leach at the Confederation of British Industry says the more than 10 per cent depreciation in the pound will pinch future household spending:

The recent fall in the pound will push up the cost of everyday purchases over the coming year, which will eat into households’ spending power.

To dispel uncertainty and keep business and consumer confidence up, it’s critical that the government sets out a clear plan and timetable for forthcoming EU negotiations.

Paul Morales at Lloyds strikes a chirpier tone, noting that short-term spending could still hold up, with the “feel good” factors of the Olympics and a relatively balmy few months of weather to come.

In the short term, consumer spending habits have not fallen as sharply following the referendum as had been forecast by some. That being the case, retailers will be hoping that the current good weather holds, and that the feelgood factor being created by the Olympics translates to further spending on food and drink and Games-related merchandise.

Chart courtesy of Bloomberg

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