Retail Sales Increase Steadily

Retail sales increased by 0.4% in August compared with July 2014. Growth was stronger over the year and increased by 3.9% when compared with August 2013. Growth in retail sales has increased steadily now for 17 consecutive months year on year and 18 consecutive months 3 months on 3 months. The overall picture therefore is one of growth according to the ONS.

The amount spent in retail increased by 0.2% compared with July and by 2.7% when compared with August last year. Average store prices fell by 1.2% in the August annual comparison, the largest fall since July 2009. Food prices fell by 0.1% the first annual fall since December 2004.

Online sales fell by 0.2% to 11% of overall sales. The amount spent online increased by 8.3% between August 2013 and August 2014.

Inflation Up 1.5%

The CPI published by the ONS grew by 1.5% in the year to August 2014, a fall of 0.1% from 1.6% in July. The largest downward contribution came from a fall in the prices of motor fuel and food and non-alcoholic drinks. These pressures to lower prices were offset by upward pressure from clothing, transport services and alcohol.

Historically Low Level Of M&As

There were 37 domestic acquisitions involving a change of majority share ownership in Q2 2014 compared with 39 in Q1 2014 according to a statistical bulletin from the ONS. Domestic acquisitions means UK companies acquiring other UK companies.

There were 19 inward acquisitions, the lowest number of inward acquisitions since Q1 2013 and 17 outward acquisitions from 34 in the previous quarter. Inward acquisitions means UK companies acquired by foreign companies and outward meaning foreign companies acquired by UK companies.

Only companies with a value of over £1m are included and only transactions which resulted in a change of ultimate control.

Significant acquisitions means transactions valued at £100m or more and there was only one such domestic transaction as Babcock International Group acquired Avincis Mission Critical Services Topco Ltd disposed of by World Helicopters SARL of Luxembourg. Other inward transactions included the acquisition of F&C Asset Management Plc by the Bank of Montreal, the acquisition of Oval Ltd by Arthur J Gallagher of the US, the Benson Group by Graphic Packaging Holding Company Inc of the US and of Innovia Holdings by Fairfield LP of Guernsey.

Outward transactions included the acquisition of Arthrocare Corporation of the US by Smith and Nephew Plc, the disposal of Pharmaceutical Devices and Prescription Retail Packing Divisions of France Germany and the US by Rexam Plc, the acquisition of Rexam Pharmaceutical Devices and Prescription Retail Packing Divisions of France, Germany and the US by Montagu Private Equity LLP, the acquisition of Ave Corporation Holdings Ltd of China by RPC Group Plc, the acquisition of Studley Inc of the US by Savills Plc and the disposal of QinetiQ North America Inc by QinetiQ Group Plc.

M&As for the next bulletin include information regarding news of Vodafone's acquisition of Groupo Corporativo Ono, Spain's largest cable operator, the full share ownership take-over of Pizza Express by Hony Capital of Beijing, full control of the House of Fraser going to the Sanpower Group of China and a recommended all share merger of Carphone Warehouse and Dixons Retail Plc.

Self-Employment In UK In 2014

In 2014 there were 4.6m self-employed people in the UK accounting for 15% of people in work. It is highest percentage it has been at any point in the last 40 years. There were also 356,000 employees who had a second job in which they were self-employed.

The rise in total employment since 2008 has been among the self-employed. It is largely due to fewer people leaving self-employment than in the past. Self-employed people tend to be older than employees. Self-employment among the over 65s has more than doubled in the past 5 years to reach nearly half a million.

Average median income from self-employment has fallen by 22% since 2008-9. In 2012-13 average median income from self-employment was £207 according to the Family Resource Survey. It should be noted that household surveys tend to underestimate income from self-employment. Income figures also include individuals who made a loss whereas employed people do not get paid a negative figure. Self-employed people do not get the same benefits as employed people in terms of sick pay, paid leave or maternity pay.

London had the highest concentration of self-employed people at 17.3% followed by the south west on 16.6% and the south east at 15.8%. The north east had the lowest concentration at 10.8%.

Across Europe the country with the highest rate of self-employment was Greece with 32%. Italy came next with 23.6% and Romania with 20.4%. The high figure for Greece is partly because of the high proportion of people self-employed in agriculture and the effects of tourism. The lowest rates were in Luxembourg with 8.1%, Denmark with 9% and Estonia with 9.4%. The EU average self-employment rate was 15.2% very close to the 15% in the UK. The UK has seen the third largest percentage rise in self-employment since 2009 at 19% behind Slovenia at 23% and Estonia at 20%. These countries are small in comparison and the average percentage change in the EU as a whole was -0.1%.

CPI Up 1.6% In July

Consumer inflation grew by 1.6% over the year to July 2014, a fall of 0.3% from 1.9% in June. The largest factor in the fall in the rate was the fall in the price of clothing. Downward effects also came from alcohol, financial services, and food product groups. The largest upward effect came from transport.

GDP Up 0.8% For Second Quarter

The increase in GDP for the second quarter remained at 0.8% unrevised from the preliminary estimate of July and is the second consecutive quarterly increase of 0.8% according to a statistical bulletin from the ONS.

Agricultural output decreased by 0.2% and construction remained flat but output in two of the four main industrial groupings increased in Q2 compared with Q1. Production increased by 0.3% and services by 1%.

On the annual comparison GDP for the second quarter of this year was 3.2% higher than Q2 2013. The figure is revised upward from the preliminary estimate of 3.1%.

Unemployment Down To 2.12m

The unemployment rate continued to fall during March to May 2014 to reach 6.5%, the lowest since October to December 2008. There were 2.12m people unemployed, 121,000 fewer than December 2013 to February 2014.

The employment rate was 73.1% up from 71% on last year but higher than the pre-downturn peak of 73% for 2008. The number of employees increased by 552,000 to reach 25.83m. The number of self-employed people increased by 404,000 to 4.58m. The number of unpaid family workers increased by 13,000 to reach 117,000. The number of people on government supported training and employment schemes fell by 40,000 to 120,000.

Hours worked per week were 987m march to May 2014, up 14.1m from December to February and up 35m on a year earlier. People working full time worked on average 37.6 hours/week, part-time workers worked on average 16 hours/week. There was little change on a year earlier.

There were 33.05m workforce jobs in March 2014, an increase of 380,000 from December and 1.08m on a year earlier. Workforce jobs is a different concept from employment.

Average regular weekly earnings in May 2014 was £449/week and average total pay was £478/week (both before tax and deductions). Regular pay increased 0.7% over the year, total pay increased 0.3% over the year. Consumer inflation over the year to May 2014 was 1.5%.

Claimant Count figures show that for June 2014 there were 1.04m people claiming JSA, down 36,300 from May 2014 and 418,900 on the year. Claimant Count measures the number of people claiming benefits as a direct result of unemployment. Unemployment measures people without a job seeking work in previous four weeks and available to start in two weeks, and those out of work but have found a job and are waiting to start within two weeks.

There were 648,000 vacancies for April to June 2014, up 30,000 from January to March 2014 and 117,000 from last year.

Increase In Annual Output Of 2.3%

Production increased by 2.3% between May 2013 and May 2014 according to s statistical bulletin from the ONS. Manufacturing was the main contributor to the growth in annual production with growth of 3.7%. The monthly comparison shows that production decreased between April and May 2014 by 0.7% with manufacturing again the main contributor with a decrease of 1.3% over the month.

Governmemt Borrowing Down By £8.1bn

Public Sector Net Borrowing (PSNB) for the financial year 2013-14, excluding the temporary effects of financial interventions, the transfer of the Royal Mail pension plan, transfers from the Bank of England Asset Purchase Facility, was estimated to have been £107.0bn. The figure for the same period in 2012-13 was £115.1bn a difference of £8.1bn. PSNB ex was £94.9bn.

Public Sector Net Borrowing (PSNB) for May, excluding the temporary effects of financial interventions, the transfer of the Royal Mail pension plan, transfers from the Bank of England Asset Purchase Facility, was estimated to have been £13.3bn. In May 2013 borrowing was £12.6bn, a difference of £0.7bn. PSNB ex was £13.3bn. The PS current budget for May was -£11.8bn and PS net investment was £1.5bn.

The sectoral breakdown of PSNB shows that general government borrowing was £13.4bn of which central government accounted for £12.5bn, local government £0.9bn and non-financial public corporations -£0.1bn.

Central government net cash requirement for 2013-14 was £75.4bn, £29.6bn lower than in 2012-13 when it was £105bn. PSND for May was £1284.5bn or 76.1% of GDP.

Consumer Infaltion Up To 1.5%

The Consumer Prices Index (CPI) which measures consumer inflation grew by 1.5% over the year to May 2014, down from 1.8% in April. Transport services costs made the largest contribution. Downward effects came from food and non-alcoholic drinks and clothing sectors. These downward trends were offset by increases in motor fuels and recreation and culture.

Manufacturing Helps Index To Grow By 3%

Output increased by 3% over the year between April 2013 and April 2014 according to a statistical bulletin released by the ONS. All the main sectors increased over the year except electricity, gas, steam and air conditioning. Manufacturing increased by 4.4%.

The main components that contributed to the increase in the manufacturing production index were rubber, plastic and other non-metallic mineral products, transport equipment and food, beverages and tobacco.

The monthly comparison shows that production increased by 0.4% between March 2014 and April 2014. Output dipped in two sectors and the largest contributor to this was mining and quarrying with -1.1% then water supply, sewerage and waste management with -0.7%. Manufacturing increased over the month by 0.4% due to increases in transport equipment, computer electronic and optical products and rubber, plastic and other non-metallic mineral products.

Services Index Increase By 3.1%

The index of services published by the ONS increased by 3.1% in March 2014 compared with March last year. All four of the main components reported an increase on the same month a year ago. Business services and finance made the biggest contribution to the growth with an increase of 1.6%, distribution, hotels and restaurants also made a contribution to growth of 0.9%.

Between February and March 2014 there was estimated growth of 0.4% after growth of 0.2% between January and February. The quarterly comparison shows that output increased by 0.9% in Q1 compared with Q4 2013, unchanged from the estimate published in the preliminary estimate of GDP and consistent with the second estimate.

Annual CPI Inflation At 1.6%

CPI inflation increased by 1.6% in the year to March 2014. It was 1.7% in February. Between February and March 2014 the CPI rose by 0.2% compared with 0.3% between the same two months of last year. Downward pressure mainly came from transport, especially motor fuels but also from clothing and furniture and household goods.

Transport prices didn't change much between February and March 2014 compared with the 0.6% increase a year earlier. Petrol prices were unchanged compared with a 2.2% rise last year. Diesel fell by 0.4p/litre compared with a rise of 1.9p/litre last year. Air transport fares grew by less than they did a year ago.

As usual, prices for clothing and footwear increased between February and March but by less than last year. Downward pressure mainly came from women's outer garments. Furniture and household goods prices went up by 0.3% over the month compared to a rise of 0.8% last year.

The main upward contribution came from restaurants and hotels where prices increased by 0.5% compared with 0.2% last year mainly from price increases for overnight stays in hotels. Prices for alcohol, particularly spirits, and tobacco rose this year but fell last year.

CPIH which includes owner occupier housing costs (OOH) grew by 1.5% in the year to March 2014. RPIJ grew by 1.8% from 2% in February. RPI annual inflation was 2.5%.

Output Increase Of 2.7%

There were increases in production output of 3.8% in manufacturing, 8.5% in water and waste management and 0.2% in mining and quarrying which contributed to the increase of 2.7% in total production output over the year between February 2013 and February 2014. Only electricity, gas, steam and air conditioning reported a decrease of 8.8% due it was thought to this year's warmer February.

The main manufacturing sectors that added to the increase over the year were rubber and plastic products, transport equipment and machinery.

Total production over the month between January and February 2014 increased by 0.9% mainly due to increases in the manufacture of pharmaceuticals, transport equipment and food, drink and tobacco.

GDP Unrevised At 0.7% Growth

GDP in terms of volume increased by 0.7% between Q3 2013 and Q4 2013 according to estimates from the ONS. The figure is therefore unrevised from the second estimate published in February.

In 2013 compared with 2012 GDP is estimated to have grown by 1.7%, down 0.1% on the earlier estimate. The estimates also show that between Q4 2012 and Q4 2013 GDP grew in volume by 2.7%.

GDP in current prices increased by 1.6% between Q3 and Q4 2013, revised downward by 0.3% from the earlier estimate of 1.9%.

The estimates for the household savings ratio were 5.1% in 2013 compared with 7.9% in 2012. The household savings ratio is the amount of money people have to save as a percentage of their disposable income.

Business Services Leading Growth In Sector

The ONS index of services grew by 3.2% (IOS=106.6) over the year to January with all of the main service sectors showing growth. Business services and finance contributed the most with an increase of 3.5% and 1.4% to total growth in the service sector with administrative and support services contributing 11.3 %, distribution, hotels and restaurants also contributed growth of 1%, government and other services grew 1.7% and 0.5% to total growth and transport, storage and communication grew by 2.5% and 0.3% to total growth.

The month on month estimates show that there was growth of 0.4% in output between December 2013 and January 2014. Quarterly figures show growth of 0.8% between Q4 2013 and Q3 2013.

Slow Growth Continues On High Street

Year on year High Street sales volume's slow growth continued into February 2014. The increase was 3.7% compared with February 2013 and the monthly volume increased 1.7%. Year on year sales value increased by 3.5% compared with February 2013 and the monthly comparison shows growth of 1.3% according to figures from the ONS.

Average prices fell by 0.2% compared with February last year as fuel fell by 4.4%. Deflation last occurred in September 2009 with a decrease of 0.8% and main contributor then was fuel with a fall of 5.8%.

Online sales increased by 12.4% in February 2014 on the annual comparison and on the monthly comparison with January 2014 the increase was 2.5%.

Unemployment Continues To Fall

The number of people in employment continues to increase according to latest estimates from the ONS. Unemployment continues to fall.

Employment increased by 105,000 from August to October 2013 and increased by 459,000 over the year to 30.19m for November 2013 to January 2014. The August to October increase was due to an increase in self-employed people; the number of employed people actually fell over the same period. The employment rate for November to January was 72.3% up from 72% in August to October and 71.5% from the previous year. The employment rate was highest in the South East at 76.4% and lowest in the North East at 68.2%

Unemployment fell by 63,000 from August to October and by 191,000 over the year. The total number of the unemployed was 2.33m for November to January 2014. The unemployment rate was 7.2% for November to January from 7.4% in August to October 2013 and 7.8% from last year. The unemployment rate was highest in the North East at 9.5% and lowest in the South East at 5.2%.

The number of employees fell by 60,000 to 25.49m. The number of self-employed people increased by 211,000 to 4.46m. Unpaid family workers decreased in number by 7,000 to 108,000. The number of people on government supported training and employment programmes classified as employed decreased by 38,000 to 132,000.

There were 32.35m workforce jobs ie. jobs filled in the economy, in September 2013 an increase of 216,000 from June and 598,000 on the year. The largest increase in jobs was in professional, scientific and technical activities up 137,000 to 2.62m.

In January 2014, regular pay was 1.3% up over the year from November to January to £451/week and total pay was up 1.4% to £479/week.

2.4% Increase In Business Investment

The ONS recently released the latest figures on business investment in the UK. The release includes breakdowns of total gross fixed capital formation (GFCF), business investment being only one component. They show indicators of investment in assets such as dwellings, transport equipment, machinery, buildings and intangible assets. GFCF increased by £1.3bn, or 2.4%, to £56bn over the quarter, business investment was the largest component.

Business investment also increased by 2.4%, an estimated £0.8bn, compared with the last quarter. It is 8.5% higher than Q4 2012.

The data in this survey are concerned with net investment that is the value of capital expenditure minus the value received from disposals. Net investment was considered to have been relatively weak through 2012 and 2013 compared with other sectors of the economy because even though there was relatively strong growth in the acquisition of assets there was also the increasing disposal of assets which grew more strongly than acquisitions and still remains high.

The primary data source for the business investment statistics from the ONS is the Capex, or Quarterly Capital Expenditure Inquiry.

Services Index Increases By 3.2%

The Index of Services produced by the ONS increased by 3.2% on the annual comparison in December 2013. All four of the main components increased in the most recent month on the monthly comparison.

Business services and finance made the biggest contribution with an increase of 1.4%. Distribution, hotels and restaurants also made a significant contribution with an increase of 1%.

The index estimates that output increased by 0.2% between November and December of 2013 following an increase of 0.5% between October and November 2013.

Over the quarter Q4 2013 compared with Q3 the index reported an increase of 0.8%. The IOS is estimated to have increased by 1.9% in 2013 compared with 2012.