Aug 16 (Reuters) – UK’s FTSE 100 slipped on Friday, after a five-day rise that paved the way for a strong weekly gain for the benchmark stock index, as abating fears of a likely recession in the United States bolstered investor sentiment.
Thursday’s U.S. retail sales data helped allay some of the recent recession fears in the world’s largest economy, helping the UK’s benchmark index to reclaim levels seen before Aug. 2, when a U.S. payrolls data deepened a heavy selloff in risk assets globally.
The squeeze on British consumers from high inflation in 2022 and 2023 is beginning to ease, in light of the Bank of England this month cutting interest rates for the first time from their 16-year high.
“While it’s good news that the retail sector has returned to growth at the start of Q3, it is perhaps not as good as the 0.5% month-on-month rise suggests,” wrote Alex Kerr, UK economist at Capital Economics.
“Rising real incomes, as inflation falls, should mean consumer spending growth accelerates over the rest of this year.”
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Reporting by Ankika Biswas in Bengaluru; Editing by Mrigank Dhaniwala
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