UK business activity at four-month low due to staff shortages amid ‘pingdemic’ – live | Business
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Retail sales in the UK staged a small recovery in June, rising 0.5% from the previous month, when sales fell 1.4%, due to a surge in people going out as bars, pubs and restaurants reopened indoors. The reading is slightly better than the 0.4% gain predicted by economists.
The Office for National Statistics said sales were boosted by a 4.2% increase at food stores, as people bought more food and drink at the start of the Euro 2020 football tournament.
The Olympic Games, also delayed from last year, open in Tokyo today. You can read more here:
UK petrol and diesel sales also increased in June, by 2.3%, the ONS said, as people travelled more, but they remain 2.1% below their pre-coronavirus pandemic February 2020 levels. Non-food stores reported a 1.7% drop in sales volumes, because of declines at furniture stores and clothing shops. Household goods suffered their first decline that wasn’t driven by lockdown since the start of the pandemic.
Online purchases remain much higher than before the pandemic, but have fallen back as more people go to physical shops. The proportion of sales online fell to 26.7% in June, from 28.4% in May.
The picture is brighter for the past three months to June, when retail sales rose 12.2% from the previous three months, driven by a strong rebound in April when non-essential retailers were allowed to reopen after the latest coronavirus lockdown.
Overall, retail is in pretty good health – sales in June were 9% above pre-virus levels.
This morning, we are also getting the flash readings on the July industry surveys from IHS Markit. Sara Johnson, executive director of global economics at Market, says:
In the face of headwinds from the Delta variant of the Covid-19 virus, the global economic expansion is moving forward – albeit more tentatively than a month ago. Outlooks in advanced countries with high vaccination rates reman bright, but near-term prospects in emerging and developing countries with low vaccination rates are murkier.
Asian stock markets are mixed after a volatile week when traders have been torn by hopes for the global recovery and fears over the spread of the Delta variant. Hong Kong’s Hang Seng has fallen 1.1%, Singapore’s Straits Times Index is down 0.2% and the Australian market is flat.
Michael Hewson, chief market analyst at CMC Markets UK, says:
The recovery from the Monday sell-off continued apace yesterday, with the FTSE-100 being the notable party pooper … while the rest of Europe closed higher for the third day in succession.
US markets, and in particular tech stocks led the way, with the Nasdaq 100 closing at a new record high, with the S&P 500 just falling short. This positive finish should translate into a higher European open despite a weaker Asia session, and with Japanese markets closed.
Yesterday’s European Central Bank meeting didn’t provide much in the way of excitement with ECB President Christine Lagarde once again talking a lot while saying very little.
The new forward guidance merely outlined that the ECB was likely to be ultra-accommodative for a long time to come, and if anything was the equivalent of giving a rather battered old car a new paint job, and a quick engine tune-up. It looks nicer but it’s still the same old banger underneath.
- 8.15am BST: France Markit Manufacturing/Services/Composite PMI for July
- 8.30am BST: Germany Markit Manufacturing/Services/Composite PMI for July
- 9am BST: Eurozone Markit Manufacturing/Services/Composite PMI for July
- 9.30am BST: UK Markit Manufacturing/Services/Composite PMI for July
- 2.45pm BST: US Markit Manufacturing/Services/Composite PMI for July