Higher Store Sales in the United Kingdom Surprise Economists

The UK Office for National Statistics (ONS) reported that retail shop sales in the United Kingdom unexpectedly increased by 1% from May to June. The increase came as a surprise to economists because they forecasted a 0.3% drop from May to June. This happened after disappointing retail sales in May, which was believed to be caused by the declining confidence of consumers in the UK economy and personal finances. Currently, the UK economy is at risk because of the uncertainty brought about by Brexit or the United Kingdom’s withdrawal from the European Union. Brexit was set to happen in March but did not push through because of disagreements. If it had happened, it would have meant a rise in prices, especially of imported goods. Contrary to what experts thought, the confidence of consumers to buy was not heavily affected by Brexit’s uncertainty. In fact, ONS official Rhian Murphy reported that, in June, consumers had a stronger demand for various items such as clothes, furniture, lighting, floor covering, paint, and glass. Charity shops, which sell items donated by the public, and antique shops, which auction off items bought from previous owners, also sold many secondhand items. The retail sales drop in May was simply a result of the uncharacteristically cold weather, a report noted. According to British economist Paul Dales, consumers are spending more because of the steady increase in wages. Reports also claim that the unemployment rate in the United Kingdom is also at its lowest since 1975. Another economist notes that consumers will likely stick to their spending habits and will ignore Brexit threats until it actually happens.