Good morning: Is rising inflation taking its toll on the great British consumer? Downbeat surveys by the British Retail Consortium and Barclaycard suggest that it might.
Spending growth fell to 2.8 per cent year on year in May, a ten-month low, according to the Barclaycard data, as shoppers reduced spending across several categories including household goods and clothing. Figures from the British Retail Consortium and KPMG showed that total UK retail sales rose by 0.2 per cent, significantly down on the 1.4 per cent growth recorded last May.
We have led the business section on the surveys this morning. You can read the story from Tom Knowles, our economics correspondent, here.
Markets snap
“Challenging” is how AO World describes the current retail environment. Alongside full year results this morning the online retailer has warned that its growth rate will “slow significantly year on year in the first quarter”. It has reported a pre-tax loss of £7 million, up from £6.7 million last year, despite a 17 per cent increase in sales to £701.2 million.
Shares in AO World popped on their stock market debut in 2014. Floated at 285p, they soared above 400p on the first day of trading. They closed yesterday at 145p, a profit warning and the departure of both its founder and longstanding chairman having taken their toll over the past three years. It is hard to see them bouncing back on these results.
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Elsewhere this morning the independent directors of Shawbrook have recommended that the bank’s shareholders reject a bid by its largest private equity shareholders to buy the shares they do not already own, arguing that the offer “undervalues Shawbrook and its prospects”.
Finally, opposition appears to be mounting to Saudi Arabia’s attempt to list a minority stake in Saudi Aramco, the $2 trillion state oil company, on the London Stock Exchange.
Aimee Donnellan, banking correspondent at The Sunday Times, reported at the weekend that fund managers had warned regulators that “they would not tolerate any listing that did not adhere to the market’s rules and standards”.
This morning the financial commentariat has weighed in.
Writing in The Guardian Nils Pratley hopes that “the intervention . . . will knock some sense into the politicians, bankers and regulators who seem dazzled by the prospect of Saudi riches”.
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Our financial editor, Patrick Hosking, argues in today’s paper “that Britain will do more in the long run to burnish its investor-friendly credentials, and its standing as a reliable filling station for companies seeking capital, by maintaining its standards and resisting the temptation to bend the rules”. You can read his column here. He is, as ever, spot on.
Don’t forget to follow me on Twitter @fletcherr and keep sending me thoughts or observations to richard.fletcher@thetimes.co.uk. Have a great day.
Richard