In World Economy News 12/10/2016
British consumers picked up the pace of their spending in September after a weak August, but the country’s planned exit from the European Union is likely to weigh on sales ahead, an industry group said on Tuesday.
Spending rose by fell by 1.3 percent compared with September last year, recovering from a fall of 0.3 percent in August, the British Retail Consortium said.
However, the average growth in total sales of 0.9 percent over the past 12 months was the slowest since the BRC began publishing its Retail Sales Monitor in 1995, the group said.
“The monthly out-turn continues to highlight ongoing volatility in retail spending and to reflect longer-term economic headwinds,” BRC chief executive Helen Dickinson said.
Retailers were starting to mitigate the impact of higher import costs due to the fall in the value of the pound, she said in a statement, adding to signs that prices are likely to rise following the EU referendum in June and eat into spending power.
The BRC added its voice to a chorus of business groups who are calling on Prime Minister Theresa May to minimise the impact of Brexit on the economy.
“The BRC will be ensuring that in the forthcoming Brexit talks government negotiators have their sights set firmly lowering import costs as well as avoiding any increase in tariff costs as the UK leaves the EU,” Dickinson said.
On a like-for-like basis, stripping out changes in the amount of retail space open to shoppers over the past 12 months, sales rose by an annual 0.4 percent in September after falling by 0.9 percent in August, the BRC said.
Over the three months to September, total sales were up 1.0 percent, higher than in most of 2016 but slower than in 2015.
Separately on Tuesday, credit card firm Barclaycard sounded more upbeat, saying consumer spending grew by 3.6 percent in the July-September period, speeding up from 2.8 percent and 3.1 percent in the first and second quarters of 2016.
Barclaycard also said its measure of consumer confidence in the British economy hit its highest level since it began tracking it in 2014, with 48 percent of people saying they feel upbeat, up from 34 percent in the second quarter.
That confidence contrasts with the mood among many employers. Surveys published on Monday showed weak investment intentions as the prospect of Brexit weighs on firms.
Source: Reuters (Reporting by William Schomberg; editing by Andy Bruce)
