A glimmer of hope on the high street: Official data show that retail sales have risen significantly for three years, thanks to the biggest increase in online spending
- According to ONS, retail sales in the UK rose by 0.2% last month
- The increase was due to an increase in online spending of almost 7%
- The department store sector grew for the first time since the beginning of last month
UK retailers today received some rare good news as official data showed a surge in sales due to an online spending boom.
According to the National Statistics Office, retail sales rose 0.2 percent month-on-month, bucking the forecasts of a 0.2 percent decline.
This is the biggest increase in online sales in three years, and the surprisingly positive retail sales were seen as evidence of the "impressive" resilience of consumers.
The numbers showed that the British spent more money than expected in the past month despite fears of a recession and continued paralysis of Brexit.
According to ONS, chains such as House of Fraser and Debenhams posted an increase of 1.6%.
Even the weak department store industry saw gains for the first time since the beginning of last month. According to ONS, chains such as House of Fraser and Debenhams posted an increase of 1.6 percent, reflecting stronger apparel sales.
Household goods sales, however, were 5.4 percent lower than in June and 3.3 percent lower than in the previous year.
According to ONS, growth in all sectors in the last three months was "only modest" at 0.5 percent. This is the lowest increase this year as food and fuel vendors suffered a slowdown.
Rhus Murphy, ONS retailer, said: "Retail sales have grown only moderately in the last three months. Although there was still a decline in the quarter, July saw a rise in department store sales for the first time.
"The strong growth in online sales during the month was driven by promotions."
According to ONS, growth in all sectors in the last three months was "only moderately" at 0.5 percent
The mixed results have not stopped the pound from selling the much-needed growth. The Cable gained 0.2 percent to $ 1,209, while the pound reached a weekly high of $ 1,084 against the euro.
The chart shows how the pound gained against the dollar after being released to the retail market on Thursday
It is a difficult period after fourteen days, with the currency plunging to multi-year lows amid growing fears of a global recession and hopeless Brexit.
XTB's David Cheetham says, "The UK consumer continues to show impressive resilience to the slowing economy and political uncertainties, with retail sales exceeding estimates in July."
There follows a surprise rise in inflation to 2.1 percent as the cost of computer games, restaurants and hotels rose – another indication of strong demand.
The pound also gained against the euro, but still remains close to the multi-year lows
The positive mood of the release is in stark contrast to June retail sales released by the British Retail Consortium and KPMG earlier this month.
The rival survey found that spending fell the fastest in the months to July, the month ever.
The BRC also noted that more than a tenth of the British stores were empty last month, as the harsh conditions demanded a toll on the stationary chains.
Philipp Gutzwiller, head of retail at Lloyds Bank, said: "The falling pound has undoubtedly helped retailers in the short term as more Britons stay home this summer and may spend their real wages on fashion and home improvement.
The BRC also noted that more than a tenth of the UK stores were empty last month
"However, many companies – including food retailers – will have to be wary of the inevitable impact on prices in the future."
Ian Geddes of Deloitte warned that sales could slow down for the rest of the summer.
& # 39; The retail industry as a whole is still under pressure, and with the discounting period over, we could see a decline in sales for the rest of the summer.
"Uncertainty about Brexit may continue to impact on consumer confidence and budgetary spending for the time being."