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What's going on?

Data out on Tuesday showed that UK retail sales fell again last month.

What does this mean?

The Queens 70th Jubilee wasnt going to celebrate itself: street parties needed hosting, bunting needed hanging, and flip-flops needed wearing. But while the festivities did give food and fashion sales a lift at the start of June, they werent enough to offset an overall slowdown in spending across the country. That comes as shoppers are continuing to cut back on nice-to-haves like electrical appliances and homeware, while downgrading their must-haves to own-name brands or cheaper alternatives. All in all, UK retail sales fell 1% last month from the same time last year a third-straight monthly fall, with sales now slipping at a pace not seen since the bleakest phase of the pandemic.

Why should I care?

The bigger picture: The crisis is spreading.
Its not hard to guess why shoppers are tightening their belts, and data from Barclaycard which monitors almost half the UKs card transactions proves just how ridiculous prices are getting. Spending on basic utilities was 40% higher in June than the same time last year, while spending on car fuel was up around 25%. That might be why the abrdn Financial Fairness Trust and University of Bristol just estimated that nearly 40% of UK households are either in “serious financial difficulties” or “struggling to get by.

Zooming out: Lets call the whole thing off.
Economists think the UK will manage to evade a recession this quarter, but the likelihood itll happen sooner or later is climbing. In fact, a Bloomberg survey has shown that analysts on aggregate now think theres a 45% chance of a downturn in the next year three times higher than at the start of the year.

Originally posted as part of the Finimize daily email.

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