13. Weekly Newsletter
British retail sales remain steady in February despite expectations
In February, British retail sales unexpectedly remained unchanged, signalling stability amid improving consumer confidence in financial outlooks. This was attributed to a slowdown in inflation and anticipated interest rate reductions.
According to the Office for National Statistics, retail sales volumes remained flat, standing 1.3% below pre-pandemic levels in 2020, contrasting economist predictions of a 0.3% decline.
Despite adverse weather impacting food and household goods stores, online shopping surged, with clothing sales rising by 1.7%. This suggests a potential recovery in consumer spending despite a 0.4% year-on-year decline in overall sales volumes.
Newspapers
Over the last seven days, the UK’s front page news cycle has covered varied topics. Rishi Sunak faces tough by-election as MP Scott Benton quits, limits have been placed on removal of land from food production in England and the UK is no longer NatWest’s controlling shareholder. Some of the newspaper headlines from this week were:
- Financial Times- ‘BBC to explore third-party deals as it looks to reboot under plan for future’
- Financial Times- ‘Green investment trusts’ woes harm renewable energy groups’
- Financial Times- ‘B&Q owner Kingfisher forecasts profits will fall this year’
- Financial Times- Legoland and Madame Tussauds owner to roll out surge pricing’
- The Times-’ Energy prices may rise as Treasury ‘stifles’ offshore wind’
Positive news for housing in the UK
Despite home ownership being out of reach for many in the current UK housing market, housing has become more affordable. The ratio between median house prices and median salaries, released by ONS, shows that it was at its peak in 2021 and has since dropped to 8.26. This has been due to increased wages, resulting in income growth that outperformed house price growth over the last year.
Since 2022, the wage growth in the UK has been soaring, with annual growths of approximately 3.5%. Simultaneously, a rise in home sales and a drop in mortgage rates have made the housing market seem less daunting. However, despite a rise in affordability since the pandemic, affordability remains below pre-pandemic levels, where the ratio between median house price and median salaries was at 7.86.
