• July retail sales volume up 0.2% on the month; flat (0.0%) on the year

Commenting on the retail sales figures for July, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:  

“The July retail sales figures were broadly as expected, pointing to continued weakness in light of low levels of consumer spending. While disappointing, it is not surprising given the huge squeeze on disposable incomes as a result of higher food and energy costs and the government’s austerity measures. These figures and other economic indicators suggest growth in the third quarter of this year is likely to remain sluggish, although fears of a new recession seem exaggerated.   

“While the economy faces serious challenges over the coming months, some of the pessimism we are seeing is unjustified. Many forecasts made earlier in the year were too optimistic and we now know that the economic situation is more difficult.  

“However, we still believe the government is right to persevere with its deficit-cutting programme. Given the pressures facing businesses and consumers, it is important for the MPC to maintain low interest rates until at least the middle of 2012. If there are signs of further weakness in the economy, the Committee should consider increasing the quantitative easing programme to above £200bn.”