UK Consumers Embrace ‘Feel Good Factor’ After Brexit And Carry On Spending, Despite ‘Project Fear’

Retail sales have bounced back as good weather and summer sales outweigh concerns of the predicted ‘financial doom’ forecast by the Remain campaign’s ‘project fear’, giving way to a UK Brexit “feel good factor”.

British retail sales have remained resilient in the immediate aftermath of the vote to leave the European Union (EU), with retail spending in July higher than last year. This is according to the latest consumer spending figures from the British Retail Consortium (BRC) and one of the ‘Big Four’ auditors KPMG, EurActiv reports.

Retail spending in July was 1.9 per cent higher than a year earlier, the biggest rise in six months and up sharply from 0.2 per cent growth in June.

As July was a relatively warm and sunny month, the fashion and food and drink sectors were the biggest beneficiaries of this sales growth.

Like-for-like figures – which strips out changes in floorspace and corresponds more closely with retailers’ results – showed that sales were up 1.1 per cent on the year in July, compared with a 0.5 per cent dip in June.

This dip in sales for June, the month of the referendum vote, was the sharpest monthly fall in six months that British retail sales have experienced; but stores said bad weather rather than Brexit was to blame. This leaves open the question of how big a hit the vote to leave the EU will deal to the economy.

The data are in line with figures released on Monday from credit card company Visa which showed consumer spending picked up in July, with Britons’ behaviour failing to match a post-Brexit slump in sentiment reported in earlier surveys.

“Little has materially changed for most UK households in the wake of June 23, so it is not surprising to us that sales are simply responding to their normal underlying drivers,” said Helen Dickinson, chief executive of BRC.

KPMG’s retail head David McCorquodale also noted alongside the data release:”Warmer weather helped blow away some of the post-referendum blues, boosting the UK feel good factor and giving consumers a sense that ‘life goes on’ following the initial shock of the Brexit vote.”

This is despite the Remain campaign’s ‘project fear’ which predicted that Britain leaving the EU would be an ‘economic disaster’.