Friday preview: UK retail sales to dominate newsflow

Friday is set to be another quiet day for corporate earnings and economic data, with UK retail sales for July likely to steal the focus as markets continue to look for hints at how the Bank of England may react to recent economic activity.

If the British Retail Consortium’s own data is anything to go by, July is set to be a washout for the official government figures.

The BRC reported last week that its own measure of retail activity showed a slowdown to 1.5% annual growth from 4.9% in June due to heavy rainfall, with clothing and other seasonal goods being hammered.

“We expect the pull back in spending in July to be just a blip, given the outlook for a recovery in households’ real disposable income in the second half of this year,” wrote Samual Tombs, chief UK economist at Pantheon Macroeconomic, after the BRC release.

Data earlier this week showed that wage growth recently hit a record high in the UK. Average weekly earnings excluding bonuses rose 7.8% in the three months to June - the highest since records began in 2001.

The wage data reignited concerns that the BoE may choose to hike interest rates even further at its next meeting to temper an overheating economy and fight inflation.

Back to Friday, official government figures for retail sales are due out at 0700 BST. Retail sales rose 0.7% month-on-month in June, up from a 0.1% gain in May, the Office for National Statistics said in its previous release last month.

Non-food store sales were up 1%, rebounding after a 0.5% decline the previous month, helped by increased footfall for department stores and furniture retailers during the summer sales. Food store sales were up 0.7% (May: -0.4%), but online sales growth slowed to just 0.2% (May: +2.4%) and fuel sales fell 0.2% (May: +1.7%).

Friday 18 August

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