- Posted by Shyam Gokani in Bank of England, Bremain, Brexit, Currency, Dollar, Economy, EUR, GBP, Inflation, Mark Carney, Referendum, Retail Sales, Sterling, UK
- July 21, 2016
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British retail sales suffered their sharpest monthly fall in six months in June, with officials citing poor weather hurting clothing sales rather than any impact from the vote to leave the European Union.
Retailers had not reported any anecdotal evidence of the unexpected result of the June 23 referendum affecting sales during the five-week period which ended July 5, the Office for National Statistics said.
While department stores got a boost from sales around the Euro 2016 soccer tournament and Queen Elizabeth’s 90th birthday, clothing stores suffered another poor month after unusually changeable weather.
Thus mornings figures were the first official data which might potentially have shed light on how demand was affected by the referendum, after other measures painted a mixed picture of consumer demand.
The Bank of England said on Wednesday that businesses it had spoken with had seen little change in spending patterns so far, but a closely-watched survey by polling company GfK showed one of the sharpest falls in consumer morale in over 20 years.
The ONS said that during the June period, sales volumes fell 0.9 percent, a bigger drop than economists’ forecasts of a 0.6 percent dip, after rising by an above-average 0.9 percent in May.
Compared with a year earlier, June sales growth slowed to 4.3 percent from a robust 5.7 percent in May, a bigger decline than the easing to 5.0 percent forecast.
Britain’s new Conservative government led by Prime Minister Theresa May has already dropped former finance minister George Osborne’s goal of running a budget surplus by 2020 because of a likely slowdown in growth.
Official figures on Thursday showed that public borrowing in June fell to 7.8 billion pounds from 10.0 billion a year earlier, a much bigger fall than the drop to 9.2 billion which economists had forecast.
Borrowing for the three months to June was 8.3 percent lower than a year earlier.
New finance minister Philip Hammond told parliament on Tuesday that Britain needed a new framework to tackle its budget deficit, which he said was still “very large”.
Britain’s budget deficit was around 4 percent of gross domestic product in the 12 months to March, down from more than 10 percent in 2010 but still among the highest of rich nations around the world.