Overview

• July retail sales rose 2.5% year-on-year, driven largely by a 3.9% increase in food spending that reflected higher prices rather than stronger demand
• Barclays data showed consumer card spending climbed 1.4% in July with clothing sales up 4.2% and online non-grocery purchases jumping 4.9%
• Helen Dickinson of the British Retail Consortium warned that July’s modest growth does not come close to offsetting the roughly £7 billion in additional costs imposed on retailers by the last Budget
• The Met Office recorded July as the fifth-warmest in more than 140 years, which bolstered early-month clothing and food sales before cooler weather slowed momentum
• The Bank of England forecasts consumer price inflation will reach 4% in September and food price inflation to peak at 5.5% by year-end, adding further strain on consumer confidence and retailer margins