Discounts help retail sales bounce back

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UK retail sales rose by 0.7% in July, above expectations.

The Office for National Statistics (ONS) figures also showed that the retail sector increased sales by 3.5% in the year to July.

ONS statisticians Rhian Murphy said: “Many consumer, some High Street shops in July, but online sales were very strong, supported by a number of retailers are starting promotions.

“Food sales remained stable, as people continue to the world Cup and the sun.”

On the three-month measure for may to July, turnover rose by 2.1%, the strongest three months since February 2015.

The sales growth comes despite the ongoing pressure on the High Street shops, and weakened household purchasing power as pay growth is struggling to be faster than the rate of inflation.

Clothing sales recorded their strongest year-on-year growth in December also helped by the deals, the added ONS.

Total spend online set to increase further, reaching a new record share of all retail to 18.2% in July 2018.

Meanwhile, online spending on purchase of house-sites to the record value of proportion of their total sales, at 18.2%.Wage growth weak

Andrew Wishart, UK economist at Capital Economics, said that the robust retail suggested sales for the month of July, “a certain recovery of consumption expenditure in the pipeline”.

He said: “of course, retail sales are only about one-third of the total expenditure of households, so the strength of the expenditure on the High Street, could be offset by households reducing their spending elsewhere.”

Analysis: Ian Bloom, BBC business correspondent

During the good weather have distorted these figures could go, the people from the hot baking High road and at home instead of shopping on their computers, the relentless advance of online shopping is hard to deny.

It is a record of 18.2% of all spending in the UK is doing now, an increase from the previous year by more than 15%. This boom has, in recent months, due to a splurge of promotions from the online shopping sites, sales, including Amazon Prime day.

But an interesting aspect of the numbers is that this is not just about new emerging online giants snatching business away from the traditional High Street. Buying houses quickly in this area, their online sales increased by 35% in the last year, so almost twice as fast as the average.

This reflects a trend that even the largest Department stores in more like the shop windows, with customers to visit, to see the range and selection, but then go home to order online.

“I have to admit, the weighs still weak real wage growth, consumer spending,” said Mr Wishart added. “Nevertheless, the turnover of retail trade data provides reason to believe that the expenditure of the consumer could be the growth of the post a slightly improved performance in the third quarter.”

According to the announcement, the pound rose 0.24% against the dollar at $1.2727.

Hamish Muress, currency analyst at OFX, said: “The reaction from the pound… has been muted, suggesting that the wider view on the British economy is still gloomy.

“With the chances Brexit scenario, high deal, wage growth is shrinking and inflation is rising, the Bank of England will find it difficult to follow through, on all previous notions of further interest rate increases in the future.

“As long as this Outlook remains, will the pound remain under pressure.”