Euro zone retail sales post largest monthly rise in 2016, more than market estimates

Retail sales in the euro zone posted the largest monthly rise of this year, higher than market consensus in the aftermath of the June British vote to leave the European Union.

Euro zone retail sales, a proxy for household spending, rose 1.1 percent month-on-month and 2.9 percent on a yearly basis in July, in both cases much more than market expectations, data released by Eurostat showed Monday. Economists polled by Reuters had forecasted a milder 0.6 percent increase of sales on the month and a 1.9 percent rise from the previous year.

Further, the monthly figures follow a revised 0.1 percent drop of sales in June, initially estimated by Eurostat to be flat. The EU statistics office also revised the yearly figure for June, in this case upwards, to 1.7 percent from the previously estimated 1.6 percent.

The 1.1 percent point rise in July is by far the highest monthly increase this year, more than double the 0.4 percent increase recorded in May, until now the strongest performance of 2016. Moreover, retail sales were boosted by rise in consumer spending on fuel. Sales of food, drinks and tobacco products rose 1.1 percent.

Meanwhile, the boost in retail sales came in the month that followed the June 23 Brexit referendum, a sign that consumer morale has not yet suffered a massive hit after Britons voted to leave the European Union.