The pound continued to weaken on fears of a no-deal Brexit, falling below $1.28 to its lowest exchange rate for the year against the dollar. Against the euro, sterling dipped below €1.11 - though the single currency was also weak on concerns about the impact of the Turkish crisis on European banks.
Official data showed the UK economy bounced back in the second quarter of this year, with GDP growth of 0.4% after just 0.2% in the first quarter.
“The economy picked up a little in the second quarter with both retail sales and construction helped by the good weather and rebounding from the effects of the snow earlier in the year,” said ONS head of national accounts Rob Kent-Smith. “However, manufacturing continued to fall back from its high point at the end of last year and underlying growth remained modest by historical standards.”
London’s economy has largely shrugged off Brexit so far, with activity and employment growing faster than elsewhere in the UK, said a report by the Centre for London think-tank.
UK house prices rose at their fastest pace this year in July, according to Halifax. Prices increased by an annual rate of 3.3% in the three months to July. But while the average UK house price hit a record £230,280, market activity remains “soft”, Halifax said.
There were calls this week for the government to review its decision to accelerate an increase in the state pension age. This followed the release of data showing improvements in life expectancy have slowed.
Increases in female life expectancy dropped from 12.9 weeks per year between 2006 and 2011 to 1.2 weeks a year from 2011 to 2016, according to the ONS. For men, increases in life expectancy fell from 17.3 weeks per year between 2006 and 2011 to 4.2 weeks a year between 2011 and 2016.
The ONS’ Alan Evans said: “The slowdown in life expectancy improvements that has been observed in the UK since 2011 is also evident in a number of countries across Europe, North America and Australia.”
The hot weather kept Britons out of the shops in July, though it helped sales of food and drink for barbecues and World Cup celebrations, according to the latest British Retail Consortium figures. Non-food sales dropped 1% in July compared to last year, but there was a 4.5% year-on-year increase in food and drink spending.
“For all the hopes placed on the World Cup and the glorious weather, it seems retail sales still fell short of expectations,” said Paul Martin, UK head of retail at KPMG. “Unsurprisingly, food and drink fuelled the majority of sales growth thanks to summer BBQs, picnics and football festivities, whilst elsewhere growth was mainly witnessed among the holiday essential categories, including health and beauty, deck chairs and fashion.”
Car sales in the UK rose 1.2% in July thanks to good weather and attractive sales offers, according to the Society of Motor Manufacturers and Traders. Nearly 164,000 cars were sold in July - typically a relatively quiet month for the industry.
Ian Plummer of Auto Trader, the car sales website, said car makers had been racing to clear stocks before new EU regulations on fuel economy and emissions take effect in September, resulting in some good deals for consumers.
Main source of information: Company Report and Accounts, Bloomberg
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