Aurelia Butler

UK retail sales are declining at a pace not seen since the worst months of the pandemic, according to industry bodies, as soaring inflation hits household finances, new data show.The volume of retail sales declined for the third consecutive month in June, falling at an annual rate of 1 per cent, according to figures compiled by advisory services group KPMG and the British Retail Consortium industry body. Helen Dickinson, chief executive at the British Retail Consortium, said sales volumes “are falling to a rate not seen since the depths of the pandemic, as inflation continues to bite and households cut back spending”.She added that discretionary purchases were hit particularly hard, especially appliances and homeware, while consumers traded down to cheaper brands when buying food and other products.The Queen’s Jubilee weekend from June 2 to 5 gave food sales a temporary boost. Meanwhile, the fashion sector benefited from the advent of summer and the wedding season. But, said Dickinson, “this was not enough to counter the substantial slowdown in consumer spending”. BRC noted that its calculations were not adjusted for inflation, which is running at a 40-year high of 9.1 per cent, meaning that the recorded drop in retail sales masked a larger fall.The monthly retail data from BRC are released earlier than official figures, which in May confirmed that the volume of retail sales fell that month. Official data to be released on Wednesday is expected to show that falling sales contributed to a weak economic performance in May, with economists polled by Reuters forecasting that the economy flatlined last month, with UK output showing no growth since January.Consumer spending data tracked by payments company Barclaycard, which monitors almost half of all UK credit and debit card transactions, showed that household bills have continued to mount. Household spending on utilities jumped by an annual rate of about 40 per cent in June with car fuel spending up by about 25 per cent, laying bare the squeeze on households’ income as energy prices rise.In contrast, spending on household goods fell 5.1 per cent in June compared with May, while spending on home improvements and in furniture stores dropped 7.4 per cent and 2.7 per cent, respectively.

José Carvalho, head of consumer products at Barclaycard, said the continued rise in fuel, food and energy prices “means consumers are having to budget and seek out value where they can for both essential and non-essential purchases”.Similar trends have been reported by the Office for National Statistics based on data from the financial technology company Revolut. The analysis showed British spending on entertainment was down 20 per cent in the first week of July compared with February 2020, before the pandemic. However, spending on fuel is up 70 per cent over the same period. James Andrews, personal finance expert at the comparison website Money.co.uk, said the trend “may prove to be a prelude to a painful recession later in the year”.There were strong indications that travel and events restarting had given some sectors a boost. Spending at restaurants was down 3.3 per cent compared with June 2021, but up 0.8 per cent from the previous month, Barclaycard data showed.Spending on travel agents, air tickets and hotels, resorts and accommodation also gained last month as holidaymakers rushed to book summer getaways. More

SINGAPORE (Reuters) – Global banks are rushing to sell bonds in Singapore, where unique monetary settings have opened a favourable borrowing window that puts the city-state’s debt markets on course for the biggest year of bank-capital raising in more than a decade.Singapore’s central bank manages policy via its currency, rather than short-term rates, and one consequence has been the benchmark Singapore Overnight Rate Average (SORA) lagging a rise in comparable borrowing costs for U.S. dollars.Unlike other low-rate destinations in Europe or Japan, the Monetary Authority of Singapore is also keen on keeping the Singapore dollar steady, reducing currency risk, and investor appetite has been strong.Almost S$12 billion ($8.5 billion) has been raised in Singapore’s debt markets from Jan. 1 to July 6, the largest for the period since 2019, according to Refinitiv data, with June the biggest month for issuance by value since Sept. 2021.About half of the S$3.5 billion raised in June and a fifth of the year-to-date figure are “Tier 2″ notes, issued by banks for reserve capital requirements – the biggest slice of this type of debt that Singapore has seen in over 10 years.”Debt markets here are still quite well behaved, rates have not risen significantly,” Daryl Ho, senior investment strategist at Singapore’s DBS Bank, said at a briefing, in contrast to deteriorating conditions in bigger markets.”Naturally, you’ll attract a lot of issuers.”Through June, SORA, a volume-weighted calculation on unsecured interbank loans and a benchmark for longer rates, averaged about 1% against an average of just over 1.2% for overnight dollar LIBOR.Private banks have led solid investor demand. UOB, the bookrunner for a S$900 million Tier-2 note for HSBC in June, said it was oversubscribed – with private banks the biggest buyers – and that 5.25% was a competitive price.”The Singapore dollar trade was priced about 20 to 25 basis points tighter than what they would have achieved in the U.S. dollar market,” said Carolyn Tan, UOB’s head of debt capital markets for bonds. HSBC had no comment.Lenders such as BNP Paribas (OTC:BNPQY), ABN Amro and Barclays (LON:BARC) also sold debt in Singapore dollars recently. Barclays’ S$450 million alternative Tier-1 deal last week had a coupon of 8.3%, against a coupon of 8.875% on £1.25 billion ($1.5 billion) raised a week earlier.”I would expect a lot of bank treasurers would look at this market very closely,” said Ken Wei Wong, Barclays’ head of Asia-Pacific fixed income syndicate.”There is momentum … given the dislocation in G3 (currencies).”Money-market futures are priced for that to continue, with three-month eurodollar futures, which track the cost of borrowing U.S. dollars abroad, showing traders see interest rates hitting 3% by year’s end.”Financial institutions are likely being pro-active,” said Andrew Wong, vice president of credit research at OCBC Bank in Singapore.”For now, the Singapore dollar market is relatively cheaper than other markets so as long as this dynamic holds then we expect financial institutions will continue to issue in Singapore dollars.”($1 = 1.4016 Singapore dollars)($1 = 0.8331 pounds) More

Javid, a former finance minister and health minister, is one of several candidates to be Conservative Party leader promising tax cuts. He said he would bring forward an income tax cut, halt a corporation tax rise, and scrap an increase in social security contibutions.He would also cut fuel duty by 10 pence a litre and launch a new 5 billion pound package to reduce energy bills.”It is vital that we do more to support families dealing with the spike in inflation,” Javid said in a policy document.”These are one off costs to be announced in an Emergency Budget which … will have minimal impact on fiscal headroom in 2024/25.”Javid quit the government last Tuesday, the first senior minister to resign over Johnson’s handling of a string of scandals, triggering the eventual implosion of the government.In a document setting out his economic plan, Javid said he would bring forward a planned income tax cut to 19% from 20% to come in from 2023, rather than in 2024.He also said he would ditch the National Insurance Levy – an increase to social security contributions that took effect in April and he publicly defended as health minister to boost spending on the National Health Service and social care.He said he would hold corporation tax at 19%, rather than raise it to 25% as is currently due in April 2023, with a long term goal of reducing the tax to 15%.He said he would control public sector wages by ensuring pay does not go up by more than recommended by independent reviews. More