Good morning.
A glut of food and drink over the Platinum Jubilee weekend failed to boost retail sales as consumer spending remained subdued amid rising inflation.
Retail sales fell 0.1% in June, according to the ONS. That’s ahead of May’s 0.8% drop and better than feared, but still points to a worrying picture for the economy.
Food sales rose 3.1% thanks to the royal holidays. But that masked a 4.3% drop in fuel sales as pump prices soared to record highs while other sectors also declined.
Meanwhile, GfK’s latest consumer confidence survey remained at a 48-year low as rising food and fuel prices left consumers feeling “severely depressed”.
5 things to start the day
1) Why the end of the ECB’s disastrous negative rate experiment won’t save Europe Lagarde’s landmark rate reversal does little to quell fears of a protracted crisis
2) Tata threatens to close Port Talbot steel Firm seeks £1.5bn taxpayer grant to keep site open
3) Report on failed SFO Unaoil bribery investigation allows chief director Lisa Osofsky to pledge to stay and implement recommendations
4) Top Tory donors attack Rishi Sunak’s ‘ridiculous’ tax plans Sir Rocco Forte’s call for tax cuts is echoed by business leaders and economists
5) Why Thatcher’s tax cuts are so hard to replicate Experience around the world shows that cutting taxes helps boost growth
What happened during the night
Asian stocks were on track for their best week in months and the dollar held off recent record highs after the European Central Bank raised rates for the first time in more than a decade and bets on the size of rate hikes in the United States were reduced.
Japan’s Nikkei rose 0.2% this morning and was on track for a seventh straight day of gains. It’s likely to be the index’s best week since March.
The broadest index of Asia-Pacific shares outside Japan fell 0.03%, but the index is still poised for its best week in about two months.
Hong Kong’s Hang Seng index rose 0.1%.
It arrives today
- Economy: Services PMI (UK, US, EU), Manufacturing PMI (UK, US, EU), Composite PMI (UK, US, EU), Retail Sales (UK)
- Corporate: Beazley (interim); JTC (Commercial Update)