Retail sales are falling at their fastest pace since Britain was in the grip of lockdown as rising inflation and a deepening cost-of-living crisis force shoppers to tighten their wallets. Overall sales fell 1% in June, marking the third consecutive month of decline, according to the BRC and KPMG. The figures are not adjusted for inflation, meaning there is likely to be a much larger drop in the actual number of products sold. Food sales rose in the quarter to the end of June, but non-food sales fell 4.2% as consumers cut back on discretionary items.

5 things to start your day

  1. Euro slips to edge of parity with dollar on fears Putin will cut off natural gas The single currency fell to a new 20-year low against its US counterpart after the shutdown of Russia’s main natural gas pipeline to Germany .
  2. The disaster scenario of a winter without Russian gas Millions of jobs are at risk and rationed gas is on the table if the Kremlin stops supplies.
  3. Bank of England governor slaps Tory leadership candidate Andrew Bailey warns of attacks on Threadneedle Street independence after Tom Tugendhat claimed he had fueled inflation with quantitative easing.
  4. Macron pumps taxpayer money into microchip factory to escape China’s clutches French facility comes as Britain’s biggest microchip factory faces divestment
  5. Biggest rail strikes in 25 years as drivers and station staff walk out Aslef, the drivers’ union, said its members had voted for industrial action at eight train companies, marking the first national strike since in 1995.

What happened in the night

Asian shares fell this morning, weighed down by the prospect of further monetary policy tightening by central banks, the renewed Covid outbreak in China and an energy shortage in Europe, which also left the euro within touching distance of parity with the safe haven dollar. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.8 percent to its lowest level in two years, while Japan’s Nikkei lost 1.75 percent.

It’s coming today

Corporate: Grafton Group, Wincanton (transaction update) Economics: ZEW economic sentiment (EU), Andrew Bailey (UK) speech