U.K. retail sales unexpectedly surged in the month after Britain voted to quit the European Union, as hot weather bolstered sales of clothing and footwear and a drop in the pound encouraged tourists to snap up watches and jewelry.
The volume of goods sold in stores and online jumped 1.4 percent, after dropping 0.9 percent in June, figures from the Office for National Statistics showed on Thursday, exceeding a prediction of 0.1 percent. Sales excluding auto fuel advanced 1.5 percent.
The report suggests the economy started the third quarter on a strong footing, even after the Brexit referendum knocked confidence and prompted the Bank of England to revise down its growth forecasts. The ONS collected the data between July 3 and July 30, making this the first full report since the vote.
“This relative resilience in spending is not too surprising since the fundamentals — such as low interest rates, inflation and a strong jobs market — remain supportive,” said Ruth Gregory, an economist at Capital Economics in London. “But we would be wary about reading too much into the jump” because the figures can be volatile and the weather effect may prove temporary, she said.
Warm days and promotions at department stores helped propel sales in so-called non-specialized shops by 3.9 percent, the most since December 2013. Food sales were up 0.6 percent, after sliding 1 percent in June. Textiles, clothing and footwear increased 3.5 percent.
“Better weather this year could be a major factor,” said Joe Grice, the ONS’s chief economic adviser. “There is also anecdotal evidence from respondents suggesting the weaker pound has encouraged overseas visitors to spend.”
The pound has dropped more than 12 percent against the dollar since the Brexit vote, making goods cheaper for overseas buyers. Sales of watches and jewelry climbed 3.1 percent on the month and 16.6 percent from a year earlier, the most since November 2014.
Sterling jumped 0.8 percent after the data, rising to $1.3152 at 9:37 a.m. London time.
Thursday’s data may provide a fillip to the outlook, with consumer spending being a key driver of growth since the financial crisis. Even with confidence slumping in the aftermath of the referendum, the British Retail Consortium said its gauge of retail sales rose the most in five months in July.
Still, some economists say it will take time for the full effects of the decision to leave the EU to be fully felt. The BOE unveiled a package of stimulus earlier this month to cushion any slowdown. The measures included cutting interest rates to a record low 0.25 percent and fresh asset purchases.
Measured by the deflator, prices at stores — including petrol stations — fell an annual 2 percent in July, marking the 25th month in which retailers cut prices.
Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd
The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.
The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.
The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.
The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.
Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.
The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.
Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins
Oil Prices Recover from 4 Percent Decline as Joe Biden Wins
Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.
This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.
Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.
On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.
“Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”
The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.
“There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.
“Either you’re crimping energy demand or consumption behavior.”
Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020
Revenue of OPEC Members to Drop to 18 Year Low in 2020
The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.
EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.
“If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.
The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.
It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.
It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.
“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”
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