Notably, the figures were up 5.9% on what was recorded in July last year.
The pound rose just under 1% on the news, to sit at $1.31. The FTSE 100 climbed initially before falling back to sit virtually where it began the day at 6862.
“After positive inflation data on Tuesday and UK employment on Wednesday, UK data continues to defy Brexit gloom as UK retail sales smash expectations of a rise of 0.2%, printing 1.4% for the month of July,” said Tom Floyd, a trader at Foenix Partners. “With Brexit related uncertainty prevailing in the UK economic outlook it seems consumers remain unperturbed, increasing spending in good July weather as sunny conditions continue to burn through the stormy clouds of post-Brexit Britain.”
Paul Mumford, senior investment manager at Cavendish Asset Management, believes the retail figures call into question the Bank of England’s recent rhetoric and decisions.
“It’s pretty clear from these figures that the Bank of England scare stories around the impact of Brexit were, to put it kindly, inaccurate, and its decision to cut rates reckless,” he said. “Consumer confidence is strong. While the fall in Sterling will ultimately hit retailers’ input costs, many will see the benefit from purchases from overseas customers now that online sales are becoming a growth feature of their businesses. However, not too much should be read into today’s figures which are more likely to have been by the improved weather conditions.”
Investment research analyst at The Share Centre Ian Forrest sees the data released today as part of a wider picture.
“This was the latest in a series of important economic releases this week in the UK. Jobs data yesterday for the April to June period also showed no impact from the uncertainty in the run up to the referendum. The unemployment rate remained at 4.9%, as expected, while the claimant count in July actually fell by 8,600 which was better than expected.”
“Overall, the data this week was better than many expected, or feared,” Forrest continued. “It certainly shows that concerns about a big economic slowdown in the run-up to the referendum were overdone, and there are indications that consumers have not significantly changed their behaviour in the first weeks following the referendum. Of course, it is still too early to make firm judgements about the impact of Brexit and formal negotiations with the EU have not yet begun, but investors should appreciate that this data is encouraging.”
