UK retail sales were weaker than expected last month, numbers on Friday showed, while public sector borrowing was higher than forecast.
The Office for National Statistics said UK retail sales volumes increased 1.6% on-year in July, slowing from a 3.8% improvement in June. The latest reading was shy of the FXStreet cited consensus, which had forecast a 2.2% increase.
On-month, retail sales fell 0.5% in July, in line with expectations, after a 0.7% rise in June from May. June’s reading was downwardly revised from a 1.0% rise.
Separate ONS figures showed government borrowing rose in July, “as spending growth outpaced receipts despite strong self-assessed income tax revenue”.
Public sector net borrowing totalled £1.80 billion last month, rising from £1.07 billion a year prior. It faded from £12.78 billion in June. Borrowing in July is typically lower than other months due to the timing of additional receipts from self-assessed income tax.
Nonetheless, the latest reading was above the FXStreet cited forecast which had predicted an on-year fall in borrowing to around £300 million.
The ONS noted that borrowing in the financial year up to July was £56.7 billion, £6.0 billion below the same period 12 months prior, but above an Office for Budget Responsibility forecast by £2.3 billion.
Public sector net debt was equivalent to 94.1% of gross domestic product last month, 0.8 percentage points lower than a year prior, but still around “levels last seen in the early 1960s”.
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