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British retail sales growth falls to an eight month low

British retail sales growth falls to an eight month low
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It seems Britons are not buying with the same enthusiasm that they were.

UK retail sales grew in July at the slowest annual rate since November last year rising by 2.6 percent.

Month-on-month sales volume increased by only 0.1 percent last month, half of June’s figure.

That is despite prices falling at their fastest rate in almost five years, giving shoppers more for their money..

The latest stats add to signs Britain’s consumer-led recovery may be starting to lag.

Wage growth also remains very weak with increased spending coming from people cutting back on how much they save.

However some economists remain upbeat. “We do not consider this to be a sign that consumer spending is beginning to peter out. One reason is that the past two months’ figures probably represent a correction to a run of strong outturns,” said Philip Shaw, economist at Investec.

Public borrowing deficit

At the same time it was revealed that the British government failed to make major inroads into a looming overshoot in public borrowing.

There was an unexpected deficit in July for the second year running, continuing the weak start to this tax year.

Borrowing for the tax year to date is now 5.1 percent higher than the same period in 2013, largely reflecting a poor first three months of the fiscal year.

A government spokesman said this was due to a different pattern of receipts compared with 2013, when extra revenue came early in the year from a deal to recoup tax evaded by British nationals with bank accounts in Switzerland.

However this does leave the UK government reliant on a big upturn in income tax receipts to meet its fiscal goals.

with Reuters