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Jump in post Brexit retail sales major boost to economy

19 August 2016

After a dismal June in the run-up to EU referendum, when sales slumped 0.9 per cent from the previous month, sales were forecast to rise by only 0.1-0.2 per cent in July. But data from the Office for National Statistics (ONS) showed that shoppers took advantage of the month’s good weather and turned out in their droves, particularly in the non-food sector, to boost the year-on-year growth in retailing to 5.9 per cent. Sterling rose on international markets on the back of the news, which CNBC described as “adding to a positive picture for the country’s economy following the decision to leave the European Union”. Joe Grice, chief economist at the ONS, said, “These are strong numbers showing a pronounced increase in sales compared with last July. Better weather this year could be a major factor with sales of clothing and footwear doing particularly well.” He added that there was anecdotal evidence that the weaker pound had encouraged overseas visitors to spend. Ruth Gregory, a Capital Economics economist, said she was not surprised by the relative resilience in spending given such fundamentals as low interest rates, low inflation and a strong jobs market. Source

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