19th June 2017
Retail Sales On The Ropes
A few months ago, we noted that there were signs the British economy was starting to weaken, and this week brought the most worrying data yet: retail spending, the engine of recent growth, is looking decidedly ropey.
The Office for National Statistics say that higher prices thanks to sterling’s devaluation are now hindering sales, and the year on year growth in retail spending is at its lowest in four years.
The rise in the cost of living is likely to lead to political pressure from a population that is by all accounts sick of the limited austerity imposed over the last nine years, and a revivified Labour Party will see this as an opportunity to kick a weakened Government into looser fiscal policy. We are not convinced this will lead to a desire to change course on Brexit, but more likely the populist wave that led to that vote will grow in strength, with its direction and landing spot undetermined and potentially highly problematic. Unfortunately, we live in interesting times.
Read our full Market Commentary below.