A splurge on food and beverages during the Platinum Jubilee weekend failed to boost retail sales as consumer spending remained subdued amid surging inflation. Retail sales fell by 0.1% in June, according to the ONS. That’s ahead of May’s 0.8% drop and better than expected, but still paints a worrying picture of the economy. Food sales rose 3.1% thanks to royal holidays. But that masked a 4.3% drop in fuel sales as pump prices soared to record highs while other sectors also fell. Meanwhile, GfK’s latest consumer confidence survey remained at a 48-year low as rising food and fuel prices left consumers feeling “severely depressed”.

5 things to start your day

  1. Why the end of the ECB’s disastrous negative interest rate experiment will not save Europe.
  2. Tata threatens to close Port Talbot steelworks The company is demanding a £1.5bn bailout from taxpayers to keep the site open
  3. Report on botched SFO Unaoil bribery investigation lets leader off the hook.
  4. Top Tory donor attacks Rishi Sunak’s ‘ridiculous’ tax plans Sir Rocco Forte’s call for tax cuts echoed by business and economists
  5. Why Thatcher’s tax cuts are so hard to replicate Experience around the world shows that cutting taxes helps stimulate growth

What happened in the night

Asian stocks were on course for their best week in months and the dollar held on to recent record highs after the European Central Bank raised interest rates for the first time in more than a decade and bets on the size of U.S. rate hikes they relaxed. Japan’s Nikkei rose 0.2% this morning and was set for a seventh straight day of gains. It is likely to be the index’s best week since March. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.03 percent, but the index is still set for its best week in about two months. Hong Kong’s Hang Seng rose 0.1 percent. It’s coming today

Economic: Services PMI (UK, US, EU), Manufacturing PMI (UK, US, EU), Composite PMI (UK, US, EU), Retail Sales (UK) Corporate: Beazley (intermediate); JTC (transaction update)