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British retail sales unexpectedly drop in July

UK retail sales fell by 2.5% in July, strongly disappointing expectations for 0.4% rise and against June’s downwardly revised figure to 0.2% from 0.5%.

July’s drop is the biggest since January when the country returned to lockdown, with the Euro 2020 football tournament and rising coronavirus cases that sent a thousands of people into isolation, seen as main reasons for a significant drop in retail sales last month.

On the other side, online sales rose to 27.9% of total spending in July after hitting a pandemic low in June, while separate data showed that spending in entertainment increased as people returned to sport events, theatres and cinemas.

July’s data show the food store sales were down by 1.5%, compared to increase in Jun, while non-food stores registered a drop of 4.4% from the previous month, but sales are still 5.8% above their pre-pandemic levels in early 2020.

Britain’s economy continues to recover from the 2020 pandemic when the economy slumped nearly 10% after being locked for longer than many other European countries and suffered one of the world’s biggest coronavirus death tolls.

The recent data show that the economy is on track to fully recover from pandemic collapse, but there are also signs that rebound has slowed from strong acceleration seen in March and April.

Strong economic recovery helped the government to reduce huge borrowing, by starting to reduce jobs subsidies program, the most expensive element.