UK retail sales decline less than consensus, signals a favorable post-Brexit situation

Retail sales in the United Kingdom declined less than what markets had earlier anticipated, signaling a favorable post-Brexit situation as consumers seem to have shrugged off the country's surprise decision to exit the European Union.

UK’s retail sales fell 0.2 percent in August from July, a smaller decline than the 0.6 percent fall we had expected, data released by the Office for National Statistics showed Thursday. Sales were 6.2 percent higher than a year earlier, however, and July's sales figures were revised up, marking the strongest annual growth for the month of July since 2001.

Further, the figures add to signs of resilience in the UK economy, confounding fears of a sharp slowdown after June's referendum on leaving the EU. Britons voted 52 percent to 48 percent to exit the bloc, but surveys showed a rebound in consumer confidence and business activity over the summer once the initial surprise of the result had faded, reports said.

The year-on-year increase in sales, excluding petrol, last month was also higher than the 4.8 percent forecast by economists and a pick-up from 5.8 percent annual growth in July. However, including petrol, sales by volume fell 0.2 percent month-on-month but were 6.2 percent higher than August 2015.

"Despite August’s dip, spending on the high street is still going gangbusters, although some moderation will surely occur over the next few quarters," Bloomberg reported, citing Paul Hollingsworth at Capital Economics in London.