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UK retail sales recover from fall, but July seen tough - CBI
June 27, 2017 / 10:58 AM / 6 months ago

UK retail sales recover from fall, but July seen tough - CBI

LONDON (Reuters) - British shops had a better June than economists expected but retailers are their most downbeat about the month ahead since September last year, a survey showed on Tuesday, underscoring how cautious shoppers remain as inflation rises.

Gucci products are displayed in the window of a store on Old Bond Street in London, Britain June 2, 2016. REUTERS/Neil Hall/Files

The Confederation of British Industry said its monthly retail sales balance rose to +12 in June, stronger than a median forecast of +2 in a Reuters poll of economists.

The balance had slumped to a four-month low of +2 in May.

Expectations for July fell to +3, matching a low last hit in September.

“The start of summer has seen shoppers hit the high street, lifting sales - if only modestly,” Anna Leach, the CBI’s head of economic intelligence, said.

A general view shows the Bank of England in the City of London, Britain April 19, 2017. REUTERS/Hannah McKay/Files

“However, there’s no getting away from the fact that life is getting tougher, with retailers clearly cautious over the near-term outlook,” she said.

The CBI said sales were broadly in line with seasonal norms.

A rise in inflation to nearly 3 percent and a slowing of wage growth took some of the momentum out of consumer demand and the broader economy in early 2017.

A survey of consumer confidence published earlier on Tuesday showed households turned more downbeat after Britain’s messy election outcome and the latest signs of a weakening of the housing market.

The Bank of England, whose interest-rate setters split 5-3 this month on the need to raise borrowing costs to see off a rise in inflation, is waiting to see how consumers respond to the political uncertainty caused by Prime Minister Theresa May’s failure to win a parliamentary majority.

Reporting by William Schomberg, editing by Andy Bruce

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