The volume of UK retail sales continued to grow at a modest pace during July, new statistics published by the Office for National Statistics (ONS) have revealed.
Retail sales grew by 0.3% in July – exceeding analysts’ expectations, and matching the 0.3% rate of growth recorded in June.
The growth in July has been largely attributed to a rise in the volume of food sales: such sales rose by 1.5% in July, representing a small increase on June’s figure of 1.1%.
Online sales in July also increased by 15.1% when compared to the same period in 2016.
However, the ONS data revealed that the gap between wages and inflation continues to widen.
Ole Black, Senior Statistician at the ONS, commented: ‘The underlying trend at the beginning of 2017 showed a relatively subdued picture in retail sales.
‘Strong food sales have been responsible for the growth of 0.3% in July compared with June, as all other main sectors have shown a decrease. Whilst the overall growth is the same as in June, trends in growth in different sectors are proving quite volatile.’
Business groups, including the Confederation of British Industry (CBI), the British Chambers of Commerce (BCC) and the Institute of Directors (IoD) have responded to the publication of Brexit customs position papers by the Department for Exiting the EU.
The government is seeking to secure a new customs arrangement that ‘facilitates the freest and most frictionless trade possible’ between the UK and the EU.
The paper outlines two customs approaches: a ‘highly streamlined’ customs arrangement between the UK and the EU, and a new customs partnership with the EU.
Responding to the publication of the paper, Josh Hardie, Deputy Director General of the CBI, stated: ‘Companies will welcome the progress government has made . . . in publishing these papers. Over the past year, businesses have been providing policymakers with the evidence, ideas and solutions to make a success of Brexit.’
Dr Adam Marshall, Director General of the BCC, stated that businesses want ‘clarity on the UK’s future customs arrangement with the EU’.
He said: ‘Business needs to see the government’s resources focused on the conclusion of a successful customs deal with the EU. At this stage, it is critically important to keep a number of different options open in order to achieve this goal.’
Meanwhile, the IoD welcomed the government’s ‘first concerted push on trade after Brexit’. Allie Renison, Head of EU and Trade Policy at the IoD, said: ‘This is a hugely positive step from government in putting pen to paper to spell out its objectives for customs arrangements with the EU after Brexit.
‘The paper outlines options for a transitional period and for the longer term, proving that both are crucial to achieving a smooth and orderly exit.’
Data published by the Institute of Chartered Accountants in England and Wales (ICAEW) has revealed that confidence amongst businesses in the UK has taken a ‘major knock’, and has fallen into negative territory.
The ICAEW’s Business Confidence Monitor fell from a reading of 6.7 in the second quarter of this year to -8 during the third quarter.
Issues that came to light as a result of the snap General Election and the subsequent hung Parliament contributed towards the negative reading, the ICAEW suggested.
The data also revealed that the ongoing Brexit negotiations between the UK government and EU officials have also been having an effect on firms’ confidence levels.
Matthew Rideout, Director of Business at the ICAEW, commented: ‘Since the announcement of the General Election, a vacuum has been left with government’s attention swallowed by a hung Parliament and the start of EU negotiations.
‘The industrial strategy has been lost in the void, coupled with no clear signal towards post-Brexit policy. As a result, businesses cannot see through this haze of uncertainty and are struggling to look further than the end of the next quarter in terms of their decision making.’
A study carried out by the Chartered Institute of Personnel and Development (CIPD) has suggested that wage growth is set to ‘remain weak’.
Pay rises for 2018 have been forecast at just 1%. The study attributes the subdued forecast to an increase in labour supply over the past year.
Meanwhile, 23% of private sector firms stated that National Living Wage (NLW) costs have affected pay growth.
21% of businesses cited uncertainty in regard to access to the EU single market as having an effect on income growth, and a further 21% believe that the government’s auto enrolment pensions scheme has affected wage growth.
Gerwyn Davies, Senior Labour Market Analyst at the CIPD, said: ‘Predictions of pay growth increasing alongside strong employment growth is the dog that hasn’t barked for some time now, and we are still yet to see tangible signs of this situation changing in the near-term.
‘The facts remain that productivity levels are stagnant and public sector pay increases remain modest, while wage costs and uncertainty over access to the EU market have increased for some employers.’
Data published by the Office for National Statistics (ONS) has revealed that retirement income has been ‘boosted’ by private and workplace pensions over the last 40 years.
The ONS found that 80% of retired UK households received income from a private pension in 2016, compared to just 45% of retired households in 1977.
It revealed that just 21% of retired households had an annual disposable income over £10,000 in 1977: in 2016, 96% of retired households had a disposable income of £10,000 or more.
The ONS also found that incomes have grown at a faster rate for older individuals than they have for the young.
Anna Dixon, Chief Executive at the Centre for Aging Better, said: ‘We have seen a dramatic and necessary reduction in pensioner poverty since the 1970s. Being financially secure is a key part of a good later life.
‘However, these averages mask inequalities. In particular, the growing disparity between those who have been unable to save into a pension and those who have not.’
Data published by UK Finance has revealed that card spending totalled £57.1 billion in June – representing a 7% rise when compared to a year earlier.
1.4 billion card payments were made in June, which constitutes a 12% rise when compared to the same time last year.
Contactless payments accounted for 34% of all card transactions, the data found. Online payments constituted 13% of all transactions.
Spending in the retail sector rose by £19 million during June, to total £26.1 billion. Spending on food and drink increased to £10 billion in June.
Meanwhile, services sector spending rose by £138 million to reach £31 billion.
Richard Koch, Head of Cards at UK Finance, said: ‘Contactless payments accounted for a third of transactions in June, with consumers continuing to use their cards for lower value purchases.
‘While spending recorded a relatively modest monthly growth, the number of transactions rose at a faster rate with some 46 million card purchases made every day.’