Some more details on the UK’s retail sales increase: it appears that the online sales surge since lockdowns redirected spending away from bricks and mortar shops has slightly abated – but it still looks like it could have a lasting effect.
The ONS said:
Online retail sales fell by 2.5% in August when compared with July, but the strong growth experienced over the pandemic has meant that sales were still 46.8% higher than February’s pre-pandemic levels.
There has been particularly strong growth in online food retail – up 90% year-on-year – which tallies with the booming demand for online grocery delivery (even if demand dropped back slightly in August). Online household goods sales are up by almost as much, at 80% year-on-year.
It’s looking like a fairly dreary start on stock market indices across Europe.
The FTSE 100’s declines have been led by industrials such as GKN owner Melrose, jet engine maker Rolls-Royce and weapons maker BAE Systems. Gold and silver miner Polymetal was the worst performer after its biggest shareholder sold its stake.
Across Europe the Stoxx 600 index was flat in opening trades. Germany’s Dax was flat, France’s Cac 40 was down 0.1%, and Spain’s Ibex fell 0.3%.
DIY helps retail sales to continued growth since coronavirus lockdown
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UK retail sales grew for the fourth consecutive month since April’s lockdown in August, but the pace of growth slowed markedly.
Sales volumes increased by 0.8% compared to the previous month, the Office for National Statistics (ONS) said, down from the 3.7% growth over July or the surges of 12.1% and 13.9% seen in May and June.
One helpful factor was increased spending on home improvements, with sales volumes at household goods stores now up by 9.9% when compared with February.
Britain’s recovery from the pandemic lockdown will in large part be driven by the UK consumer, so the slowing of growth back to pre-pandemic growth levels might suggest that the prospects of a V-shaped economic recovery are receding – or at least are not evenly spread across the economy. The ONS said:
In August, there was a mixed picture within the different store types as non-store retailing volumes were 38.9% above February, while clothing stores were still 15.9% below February’s pre-pandemic levels.
However, the ONS also pointed out that absolute sales volumes are still up by 4.0% when compared with February’s pre-pandemic level. Economists had forecast the growth slowdown, with an average expectation of 0.7%.
In financial markets stocks across most of Asia rose despite Wall Street’s declines last night, with shares in China gaining 2% on the Shanghai and Shenzhen indices.
However, the FTSE 100 dipped at the opening bell by 0.2%.
The agenda
- 9am BST: Italy industrial orders, July (previous: 23.4% month-on-month growth)
- 1:30pm BST: Canada retail sales, July (previous: 23.7% m-o-m; consensus: 1%)
Updated