4 months ago • 2 mins
What’s going on here?
June’s record-breaking heatwave had stock flying off UK supermarket shelves, according to data out on Friday.
What does this mean?
June was the UK’s hottest on record, and it seems the heatwave, coupled with tempting summer sales, had consumers hitting the high street in droves. And because no self-respecting Brit lets a good heatwave pass without firing up the barbecue, it’ll come as no surprise that food sales bounced back last month, after King Charles’ coronation nibbled at spending in May. That said, the real stars of the show were actually non-food stores: after all, department stores and furniture retailers more than compensated for declines in fuel and clothing sales. The result of all that cash-splashing fun was that the total volume of goods sold in stores and online grew by a sunnier-than-expected 0.7% in June – a leap from May’s 0.1%, and well above the 0.2% economists had predicted.
Why should I care?
For markets: Giving and taking away.
Some economists think this data, which brings last quarter’s retail sales growth to 0.4%, could help the economy dodge a contraction. But the future is up in the air: on one hand, falling energy prices could leave consumers with more pocket change – but on the other, looming mortgage payment increases could gobble up that gain. And it seems consumers are already bracing for a chillier climate, with July seeing the biggest drop in consumer confidence in over a year.
The bigger picture: Sentenced to hard Labour.
Signs of cooling inflation earlier this week will have come as a relief to the ruling Conservative party. But given the UK’s lackluster progress compared to other major economies, they’re still under a whole lot of pressure. And after losing two out of three parliamentary seats in recent by-elections, and with Labour leading in the polls, the Conservatives will need to pull out all the economic stops to turn things around.
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