Britain's July data separate monthly weakness from the longer trend
Retail volumes fell in July and public borrowing exceeded the same month last year, while both official bulletins offer a stronger picture over their longer comparison windows.
Economics & Markets··Midday
Retail volumes fell 0.5 per cent in July
British retail sales volumes fell 0.5 per cent in July, following gains of 0.7 per cent in June and 1.3 per cent in May. The Office for National Statistics revised June down from an earlier 1.0 per cent estimate and May up from 1.2 per cent. Volumes fell at non-food stores and non-store sellers, while sales of alcoholic and other drinks at supermarkets increased during the hot period. Alongside the monthly decline, the bulletin therefore records different directions across product groups.[1]
Monthly borrowing rose while the four-month total fell
Public sector net borrowing was 1.8 billion pounds in July and rose 0.7 billion pounds from the same month last year. Across the first four months of the financial year, however, borrowing reached 56.7 billion pounds and fell 6.0 billion pounds from a year earlier. Central government debt interest was 7.7 billion pounds, an increase of 0.7 billion pounds year on year. Public sector net debt stood at 94.1 per cent of gross domestic product at the end of July, a decrease of 0.8 percentage points from a year earlier.[2]
The comparison window changes the direction of the reading
Both one-month headlines look weak: retail volumes fell in July and borrowing exceeded last July. Longer windows supply a different context. Retail volumes in the three months to July rose 1.1 per cent from the previous three months and 3.0 per cent from the same period a year earlier. Borrowing in the first four months of the financial year was also 6.0 billion pounds lower than a year before. One measure covers household demand and the other public accounts, leaving the series in separate domains. The shared lesson is that a monthly headline is not the whole trend.[1], [2]
