Following three stellar releases regarding the state of the UK economy in the last three working days, it may be tempting to declare the slowdown of the corresponding figures in July a short-term blip that was caused by an overreaction to the EU referendum. However, this would be premature in the extreme as there remains far too much uncertainty and potential pitfalls going forward to declare the economy out of the woods just yet - with a report from the British Retail Consortium (BRC) released overnight keeping the euphoria in check.
August retail sales to buck the trend?
The report from the BRC - which is prepared in collaboration with KPMG - showed that total sales in August plummeted on a year-on-year level to -0.3%, from +1.9% previously. Last time out this indicator accurately predicted the bumper July retail sales figures, which was the first in the recent line of strong UK data - therefore suggesting this latest number forecasts a significant slowdown being seen when the August data is released hours before the next BoE decision on the 15th September. Despite this warning sign, the pound remains well supported and is currently not far off its highest level in over a month against both the US dollar and the Euro.
Berkeley rises on latest trading update
Shares in Berkeley Group Holdings are the best performing on the FTSE 100 this morning, as the housebuilder’s stock has increased by just over 3% following a sound trading update released before the market open and ahead of today’s AGM. The move higher has also boosted other housebuilding stocks with Taylor Wimpey (LON:TW) and Barratt Developments (LON:BDEV) enjoying a ride higher on the coat-tails of today’s index leader. Standard Chartered (LON:STAN), Provident Financial (LON:PFG) and Standard Life (LON:SL) are the laggards thus far, with all three lower by over 1% at the time of writing.
Halfords receives boost from team GB association
The latest trading statement from Halfords has seen a decent pickup in activity, as the firm has reported a substantial increase in its retail operations in the seven weeks to the 19th August. Shares have responded positively to the announcement, rising by just under 2% since last night’s closing level. The best performing business segment was cycling, which has seen sales shift up through the gears with the twin boons of good weather this summer - and perhaps more importantly, an exceptional performance in the Olympics by team GB.
New ranges from Laura Trott and Sir Bradley Wiggins have raced off the starting line and contributed to a 12.5% increase in sales of cycling products on a like-for-like basis. The last trading update in the middle of July disappointed investors, but this latest release goes some way to get the firm back on the right track.