GLOBAL POLITICAL RISK: Trump - Israel/Hamas Agree To First Phase Of Peace Plan

source:  Bloomberg Finance LP / MNI 

• MNI: UK BRC AUG BY VALUE SHOP SALES LFL +2.9% Y/Y, TOTAL +3.1% Y/Y

BRC Shop Sales data for August shows a 3.1% Y/Y increase in total retail sales (vs 2.5% Jul, 1.0% Aug '24), above the 12-month average of 2.0%. Like-for-like sales grew by 2.9% Y/Y (vs 1.8% Jul, 0.8% Aug '24). 

• High summer temperatures, the August rate cut and back-to-school purchases are highlighted as drivers by the BRC. However, with goods inflation (particularly food inflation) running at a fast pace, sales look a lot less impressive and there may be some boost here from calendar effects.
• The data covers the four weeks from 3-30 August 2025 (which includes the whole last August bank holiday weekend) while last year's four weeks (28 July to 24 August) only included up to the Saturday of the Bank holiday weekend.
• Food sales (the largest contributor) increased 4.7% Y/Y (vs 3.9% Jul, 3.9% Aug '24), above the 12-month average of 3.3%. This isn't much higher than food cost inflation so volumes don't appear to be increasing that much. Furthermore, the hot weather likely boosted food sales. Rising energy bills and looming fears of tax hikes in the Autumn Budget call into question whether the strength seen over summer will continue.
• Non-food sales rose 1.8% Y/Y (vs 1.4% Jul, -1.4% Aug '24), above the 12-month average of 1.0%. The press release points to increases in sales of home-related goods due to moderate summer housing market growth and the spike in property transactions ahead of the April Stamp Duty changes.
• This release comes after last Friday's ONS July retail sales data, which saw a number of downward revisions to prior data. Note that the ONS data is a volume index (as opposed to the BRC's value index).
• Looking ahead, the press release notes that "with the later-than-expected Budget falling just days before Black Friday, many [retailers] are uneasy about how consumer confidence and spending could be impacted by tax rise speculation in the run-up to Christmas."