U.K. retail sales rose more than economists forecast in July as the heatwave boosted demand for food and alcohol.
Sales including fuel increased 1.1% from June, the Office for National Statistics said today in London. The median forecast of 21 economists in a Bloomberg News survey was for a 0.7% gain. Sales have gained for three consecutive months, the first time that’s happened in 4 1/2 years. From a year earlier, sales climbed 3% in July, the most since January 2011.
The data add to recent surveys of a strengthening economy after services, manufacturing and construction all improved in July. Bank of England Governor Mark Carney has introduced forward guidance to give consumers confidence that borrowing costs will remain low, while spending was boosted last month as Britain experienced its third-warmest July on record.
In the three months through July, retail sales rose 1.8% compared with the previous quarter, the most since March 2004, the statistics office said.
The monthly increase was led by food, which jumped 2.5%. Textiles, clothing and footwear fell 0.2%. Excluding fuel, retail sales increased 1.1% and were up 3.1% from a year earlier.
The Meteorological Office said Britain had its most prolonged period of hot weather since August 1997 last month. Economists also noted a boost to sales from sporting events such as Andy Murray’s Wimbledon tennis championship victory.
Unemployment data yesterday showed jobless claims fell for a ninth straight month in July, declining 29,200 to 1.44 million. That took the claimant-count rate to 4.3%, the lowest since February 2009. The broader three-month unemployment rate remained at 7.8%. That measure is now in the spotlight after Carney pledged to refrain from raising interest rates until it falls to 7%. The BOE doesn’t see that happening until at least the fourth quarter of 2016.
