The retail data points to a UK consumer still spending, but decelerating from May’s pace even with two clear tailwinds in the heatwave and the World Cup, which suggests the underlying trend is softer than the headline numbers imply. The stabilisation in travel spending after April and May’s Iran war related falls is a modest positive, but the explicit warning about food price risk from the conflict flags where the next squeeze on households could come from. On the business side, the CBI and Energy UK’s intervention lands at a politically sensitive moment, with a new prime minister about to take office, and puts early pressure on the incoming government over an issue, industrial energy costs, that has been a persistent drag on UK investment.
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Consumers spent on sun and football, but businesses want the new PM to fix their power bills.
Summary:
BRC total retail sales rose 1.9% year on year in June, slowing from 3.7% in May, while like-for-like sales rose 1.7%, down from 3.4%Barclays’ broader consumer spending gauge rose 1.9% year on year in June, up from 0.8% in May, with essential spending up 2.2%, its biggest increase in 14 monthsNon-food sales grew 1.2%, double the 12-month average, helped by online shopping, while travel spending stabilised after falls in April and May tied to Iran war concernsThe Institute of Grocery Distribution said hot weather and the World Cup could support confidence again in July, but flagged political uncertainty and Iran war linked food price risks further aheadWith Andy Burnham poised to become prime minister, the CBI and Energy UK said 40% of firms are cutting investment due to high energy costs, with electricity prices 45% above the G7 medianThe two groups called for the Renewables Obligation, Feed-in Tariff costs and Climate Change Levy to be removed from business electricity bills, changes they said could cut energy costs by up to 20%, while the TUC separately called for a higher tax on bank profits to fund lower household energy bills
British consumers kept spending in June, helped by a heatwave and the men’s World Cup, but the pace of growth cooled from May even with those tailwinds, according to data published Tuesday by the British Retail Consortium and Barclays. The BRC’s measure of total retail sales rose 1.9% year on year, in line with its 12 month average but down from 3.7% in May, while like-for-like sales rose 1.7%, down from 3.4%. Barclays’ broader gauge of consumer spending told a slightly different story, rising 1.9% year on year, up from 0.8% in May, with essential spending climbing 2.2%, its largest increase in 14 months.
Hot weather boosted sales of clothing, fans and air conditioning units, while pubs reported strong trade on England’s World Cup matchdays, and non-food sales grew 1.2%, double the 12 month average, aided by online shopping. Travel spending, which fell sharply in April and May amid concerns tied to the Iran war, has stabilised, and Barclays said consumer confidence in personal finances has also steadied. The Institute of Grocery Distribution’s Sarah Bradbury said the combination of warm weather and the World Cup could support confidence again in July, but warned that political uncertainty and the impact of the Iran war on food prices pose risks further out.
That political uncertainty is coming into sharper focus with former Manchester mayor Andy Burnham poised to become prime minister. The CBI and Energy UK used the moment to press the incoming government on business energy costs, saying 40% of firms are cutting investment because of high energy bills, with UK electricity prices running 45% above the G7 median. The two organisations called for the Renewables Obligation and Feed-in Tariff costs to be stripped from business bills, funded instead through general taxation or a dedicated Energy Transition Funding Scheme, and for the Climate Change Levy to be removed from non-domestic electricity bills. Together, they argued, the changes could cut energy costs for firms by as much as 20%. The CBI’s chief economist argued stronger economic growth cannot happen while firms face such high energy bills. Separately, the Trades Union Congress called for a higher tax on bank profits to help fund reductions in household energy bills.
New guy is going to have lots of wotk to do.
This article was written by fl6553e4b45d84486a91658a8b3f02bf22 at investinglive.com.