Retail sales are rising, bonuses are growing – but not for bankers – and companies are hiring more staff.
Strong demand for summer clothing pushed up UK retail sales in August, as expectations for employment growth climbed to a 15 year high, according to Britain’s biggest business lobby group.
The positive retail trading backdrop has encouraged shops to hire more people, data from the Confederation of British Industry (CBI) revealed on Wednesday.
For the first time this year, companies added to their workforce, while hiring expectations rose to the highest since May 2000.
Rain Newton Smith, director of economics at the CBI, said the figures were encouraging for the retail sector, which continues to be hit by falling prices.
“Household spending seems to have remained firm going into the second half of this year, so the outlook for the retail sector looks upbeat,” she said.
The CBI’s survey showed that 36pc of retailers reported an increase in sales volumes in the year to August, while 15pc reported a fall. The resulting balance of 24pc was considerably stronger than the 13pc growth the CBI had forecast and higher than last month’s 21pc.
It comes as data published by the Organisation for Economic Co-operation and Development (OECD) on Wednesday showed the UK was the fastest growing advanced economy in the second quarter. Britain’s economy grew 0.7pc in the period, compared with 0.6pc in the US, 0.4pc in Germany and a 0.4pc contraction in Japan.
Growth across the OECD club of 34 developed countries slowed to 0.4pc in the second quarter, following 0.5pc growth in the first three months of this year.
Over the year, the UK economy has expanded by 2.6pc, while the US grew 2.3pc. However, revised data on Thursday are expected to show the US economy actually outpaced the UK, growing at a faster-than-expected 3.2pc year-on-year.
Separate UK data also revealed that bonus payments rose in the last financial year. More than £42bn was paid out in bonuses in 2014-15, according to the Office for National Statistics (ONS), a 2.7pc increase on the previous 12 months. In cash terms, this almost matched the level of payments recorded in 2007-08, when bonuses peaked.
But while bonuses across the country might have grown, those working in the finance and insurance industry – where bonuses account for about a fifth of total pay – saw their rewards slump nearly 10pc over the year. Those working in professional, scientific and technical services enjoyed the biggest rise in bonuses, according to the ONS.