Top story
Warmer weather throughout July saw consumers loosened their purse strings to spend more on going out and clothes despite the uncertainty created by the vote to leave the EU.
Consumer spending increased last month as people ate out more and went on day trips, according to the latest expenditure index by Visa. However, growth was still slower than at the start of the year and the rise was at lower levels than recorded in recent years.
The monthly index, compiled with the data company Markit, showed consumer spending rose 1.6% in July year-on-year, climbing from 0.9% in the previous month.
The hotels, restaurants and bars sector benefitted the most with an 8.9% jump in spending, with the amount spent on trips to the cinema and theme parks – and other leisure activities – up by 5.2%. The high street also received a boost as shoppers spent on new summer clothes and shoes, with spending up 3.9%, compared with a fall in June.
“July’s data suggests that UK consumer spending is holding up despite the ongoing uncertainty following the referendum, albeit at lower levels of growth than we’ve seen in the last couple of years,” said Kevin Jenkins, UK & Ireland managing director at Visa.
“Looking at the last three months, the index indicates that consumers remain cautious with their spending. Overall growth is hovering nearly one percentage point below the average seen over the past two years.”
Markit economist Annabel Fiddes added: “Although the July data point to signs of improvement, anxiety around Brexit and a slowing private sector economy may pose further downside risks to expenditure growth for the rest of 2016.”
Morning update
The markets are all quiet on this Monday morning in August. But the FTSE 100 has had a positive start to the week, climbing 0.5% to 6,827.88 points.
Coca-Cola HBC (CCH) has also started well as it prepares to post interims later this week, with shares rising 1.3% to 1,590p. Marks & Spencer (MKS) is another early riser, up 1.3% to 325.8p, along with Sainsbury’s (SBRY), up 0.9% to 231.9p, and Greggs (GRG), up 0.7% to 1,042p. Compass Group (CPG), British American Tobacco (BAT) and Imperial Brands (IMB) are all in the red, falling 1.2% to 1,450p, 0.9% to 4,789p and 0.4% to 4,032.5p respectively.
This week in the City
The summer holidays are in full swing so that means a quieter week on the markets. But there are still a few interesting results and announcements scheduled. Tuesday brings the latest BRC-KPMG retail sales figures for July, as well as World Pay interims.
Wednesday sees half-year results from Stock Spirits Group, which has been fighting a boardroom war in recent months with an activist investor. There is also an AGM at Majestic Wine. Plus a Q2 earnings update from global meat packer and Moy Park owner JBS after the markets close on Wednesday.
European Coke bottler Coca-Cola HBC reports its first-half figures on Thursday.
No comments yet