Sunny weather helped UK sales rise more strongly than expected in June and shake off a gloomier start to the year, offering some signs that the economy as a whole might be regaining speed after a lull. But as Kate King reports, Brexit is still weighing on sentiment, particularly in the construction industry.
Sunny weather cause for celebration in the UK and not just for ice-cream salesmen. A particularly warm June saw retail sales grow point six percent, as Brits spent more on clothes. Year on year sales up 2.9 percent. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "My own personal view is that we have overplayed the concerns of the UK consumer. Yes they are buffeted by the weakness in sterling that has pushed up temporary spike in inflation but underpinning the consumer performance is strong employment growth and we've got unemployment it's a 42 year low here in the UK and you also have very accommodative credit conditions." The rush to buy a new outfit, offsetting a decline in food and fuel sales. Sterling fairly muted on the figures, with Brexit still leaving little room for complacency. One Survey out on Thursday showing the pace of the UK construction industry slowed over the second quarter Developers tempering plans amid widespread concern that companies will rent less space (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "It's probably a more timely indicator of where international sentiment is. A lot of international money comes into UK construction particularly in the commercial real estate space and the high value residential space. And therefore if there is some uncertainty over UK's future relationship with the European Union which there undoubtedly is right now you'll see that as a more timely bellwether than retail sales." But the better than expected retail results come off the back of below-forecast consumer price numbers. More food for thought for the Bank of England as it weighs up whether to tighten rates.