Economic Review – June 2018

Although interest rates were left unchanged following the Monetary Policy Committee (MPC) meeting on 20 June, an additional dissenting voice has increased the likelihood of a rate rise at the next meeting in August.

Last month saw further positive news in relation to the government’s finances with another decline in the total level of borrowing as the long process of fixing the state of the public finances continues.

As the second quarter came to an end, mining and banking stocks supported Britain’s top share index, with the FTSE100 enjoying its best quarter in five years. Following a turbulent last week, as trade concerns rumbled on, the blue-chip index ended June down 41.27 points at 7,636.93, a loss of just 0.54% on the month. The FTSE250 closed down 15.29 points at 20,830.97 a loss of 0.07%. While, the junior AIM ended the month down 0.17 points or 0.02% at 1,082.45.

UK workers are still waiting for a significant boost to their wages despite continuing tight labour market conditions that would traditionally have been expected to deliver a surge in pay settlements.

A strong bounce in retail sales growth has provided the ailing retail sector with some much-needed respite during the past couple of months.

Official data published by ONS showed that retail sales volumes rose by 1.3% in May compared to the previous month, significantly higher than the consensus market forecast of a 0.5% increase. In addition, April’s figures were also revised upwards to show a 1.8% increase in sales volumes.