After the outcome of the EU referendum, markets were unsure on how the economy would respond but the retail sector has seen an increase in sales in the UK retail sector.
In June, consumer spending had dropped by 0.9% according to the Office for National Statistics (ONS). Sales for July have rose to 1.4% which is higher than the predicted 0.2% by economists in a Reuters poll.
This evidence shows that so far Britain’s decision to leave the EU has had a limited impact on the UK economy thus far. However, retailers have also predicted that there could be job cuts and rising prices on the high street which could affect retailers’ profits.
So far, Brexit has not caused any immediate decisions by business owners to lay off their employees as the number of people on unemployment benefits has decreased this month in comparison to June.
Another effect from Britain leaving the EU has been the drop in the pound which has worked out positively for the British tourist industry and has caused a surge in the sales of luxury goods in the UK by 16.6% compared to last year.
Joe Grice, the chief economic adviser at the ONS, said: “These are strong numbers showing a pronounced increase in sales compared with last July. Better weather this year could be a major factor with sales of clothing and footwear doing particularly well. There is also anecdotal evidence from respondents suggesting the weaker pound has encouraged overseas visitors to spend. Department stores and specialist retailers like jewellers are among those reporting a good month.”
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