United Kingdom: retail sales holding up… before falling?

(Boursier.com) — The consumer is resisting in the United Kingdom… even if it should not last. British retail sales rose by 0.3% in July against an expected decline of 0.2% and a drop of 0.2% in June. Year-on-year, sales fell by 3.4% against -3.3% consensus. Excluding fuel, sales show an increase of 0.4%, specifies the National Statistics Office. The market was expecting a decline of 0.3%.

Alongside these rather robust data, the British consumer confidence index measured by the GfK institute fell to a record low of -44 in August (-3 points) as worries about a coming recession increased further. All index metrics fell, with the outlook for personal finance the most down. “A sense of exasperation about the UK economy is the main driver behind these findings,” said Joe Staton, director of client strategy at GfK. “The crisis of confidence will only get worse with the darkened days of autumn and the colder months of winter.”

The Bank of England has warned that the country is likely to be hit by a deep and long recession as inflation is expected to top 13% in the coming months.