UK retail sales, US economy boost

LONDON — European markets were higher Friday, rounding off what’s set to be a winning week for global stocks.

The pan-European Stoxx 600 index was up 0.2% at 8:38 a.m. London time, led by autos stocks, up 1.1%.

The regional benchmark is up more than 2% so far this week, putting it on course for its best performance since May 10.

U.S. stocks have also posted solid gains, with a big boost coming Thursday when weekly jobless claims fell and U.S. retail sales data was much stronger than forecasts had suggested.

That further signaled to investors that the jitters over a U.S. recession, which contributed to the sharp global sell-off at the start of the month, are overblown. Along with ripple effects from Japanese monetary policy, analysts say part of the volatility may be explained by a historical August trend, when trade tends to be more shallow.

The Stoxx 600 and Wall Street’s S&P 500 remain shy of the levels they started the month at, but steady gains through the week have recuperated losses from the recent rout.

On the data front on Friday, U.K. retail sales showed a rebound from a 0.9% decline in June to 0.5% growth in July, in line with expectations in a Reuters poll. Sales volumes were up 1.1% in the three months to July.

Alex Kerr, U.K. economist at Capital Economics, said in a note Friday that the retail uptick was not broad-based, with sectors such as food, clothing and household goods struggling.

“We continue to think that rising real incomes, as inflation falls, should mean consumer spending growth accelerates over the rest of this year,” Kerr said.