RetailSales

Retail sales in the United Kingdom rose sharply in June, offering the clearest sign yet that the British economy is regaining momentum after months of stagnation. According to the British Retail Consortium (BRC), total retail sales increased by 3.1% year-on-year.
This rebound was largely driven by warmer weather, which encouraged Britons to spend more on electric fans, sports gear, and leisure products. The sunny conditions also boosted foot traffic in stores, lifting seasonal sales.
BRC CEO Helen Dickinson noted strong performance across both food and non-food segments. “Retail sales rose in June in both food and non-food categories,” she said. “Food sales remained robust, though this was partly due to persistently high food inflation throughout the year.”
Food sales climbed by 4.1%, while non-food purchases increased by 2.2%, reversing the retail sector’s negative impact on GDP seen in May. Although economic uncertainty and rising living costs continue to weigh on households, consumers appear more willing to spend.

Businesses Regain Confidence as Recovery Takes Shape
The rise in retail spending is the latest in a series of indicators pointing to a possible recovery in the UK economy after a weak spring. Economic activity declined in both April and May — the first consecutive monthly contractions since 2009 — as the country dealt with a mix of domestic and global challenges, including new U.S. tariffs, corporate tax hikes, and a rise in the minimum wage that prompted firms to cut hiring and wage costs.
Now, conditions are improving. The Purchasing Managers’ Index (PMI) showed the fastest rise in private sector activity in nine months during June, covering both manufacturing and services.
A recent Bank of England survey also revealed that businesses are ready to ramp up hiring, which bodes well for employment and consumer spending. Companies plan to increase their workforce by 1.1% over the next year — a sharp rise from the cautious tone at the start of 2025.
Economist Paul Dales wrote in a report to investors that there is growing evidence that “the worst phase of the downturn is behind us,” and while recovery remains uncertain, recent data suggest confidence is returning across key sectors.

Starmer Seeks Political Breathing Room from Retail Rebound
The timing of this retail upturn couldn’t be better for Prime Minister Keir Starmer, who faces mounting pressure to deliver results. His administration is grappling with multiple issues, from the cost-of-living crisis to low productivity and sluggish growth.
Stronger retail sales, rising business confidence, and improved labor market expectations offer temporary relief. It may give his government the political space it needs to launch new reforms and investment plans without being overshadowed by a worsening recession.
Still, caution remains warranted. Amid ongoing global uncertainties, rising food prices, and possible interest rate moves from the Bank of England, economists say the UK may avoid a prolonged downturn — but risks persist.
For Starmer, this may be a narrow window of opportunity to consolidate public support and stabilize the economy. If these green shoots endure through the summer and into the autumn, the UK could end 2025 on a far stronger footing than many dared to hope at the start of the year.

#Inflation , #economy , #worldnews , #RetailSales , #UK

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