(Bloomberg) -- Warm weather helped return UK retail sales to modest growth last month as shoppers splashed out on summer clothes and health and beauty products.
UK retail sales rose 0.5% year-on-year in July, according to a report Tuesday by the British Retail Consortium and KPMG. That’s an improvement from the 0.2% decline seen in June, but a smaller gain than the 1.5% increase in July 2023.
The rise is “likely much less than retailers were hoping for,” according to Linda Ellett, KPMG’s UK head of consumer, retail & leisure, who said consumers weren’t buying expensive items.
“Spending levels continue to be governed by whether households have been able to absorb the likes of mortgage and rent increases, or had to limit their spend elsewhere as a consequence,” she said.
Consumers remain cautious with their spending after a period of high inflation, but there are signs that confidence is growing.
In a separate report Tuesday, Barclays Plc said card spending fell 0.3% year-on-year in July. The European Football Championship final featuring the England team helped to boost pub sales as spending improved from the 0.6% decline in June, but it wasn’t enough to lift it to growth.
Healthy and beauty spending also showed strong growth last month in Barclays’ data.
Last week’s cut to the Bank of England rate should help spending growth improve for the rest of this year and in 2025, said Jack Meaning, Barclays’ chief UK economist.
©2024 Bloomberg L.P.
