Rolling live coverage of business, economics and financial markets as government data show retail sales slipped despite boost from Queen’s jubilee celebrations
Good morning, and welcome to our live, rolling coverage of business, economics, and financial markets.
Holidaymakers and lorry drivers have been stuck in long queues overnight at Dover, the UK’s key ferry crossing to the EU. And the Port of Dover has come out swinging, blaming French border authorities for failing to staff the posts.
We are deeply frustrated that the resource at the French border overnight and early this morning has been woefully inadequate to meet our predicted demand and even more deeply regret the consequences that will now be felt by so many.
The cost of living crunch caused by record inflation continues to damage consumer confidence and stifle household spending. Discretionary spending and particularly bigger purchases were put off as consumers become increasingly concerned about the future. As a result, furniture sales and white goods were particularly hard hit, while food sales held up a little better.
Retailers are squeezed between higher costs and weaker demand, resulting in the most challenging trading period since the start of the pandemic.
Households are continuing to spend more on goods, but are getting less in return.
Households’ real disposable incomes likely will edge up in the third quarter, facilitating a modest recovery in retail sales. Nonetheless, disposable incomes likely will fall to a new post-Covid low in the fourth quarter, as government policy support announced to date will not offset the huge hit to real disposable incomes from October’s likely 65% rise in the energy price cap.
