U.K. retail sales decline in September
British retail sales unexpectedly fell this month after a strong showing in August, a survey by the Confederation of British Industry showed on Tuesday, contrasting with generally robust figures since June’s vote to leave the European Union.
The CBI distributive trades survey’s retail sales balance dropped to -8 in September from a six-month high of +9 in August, below all forecasts in a Reuters poll of economists.
Retailers surveyed by the CBI expected sales to recover in October, but still cut orders with suppliers for a sixth month in a row.
“Consumer confidence has been dented since earlier in 2016 and higher inflation is likely to squeeze household incomes over the year ahead. With margins remaining tight, retailers are set to continue to operate in a fiercely competitive environment for some time,” CBI chief economist Rain Newton-Smith said.
British retail spending has mostly held up well since June’s EU referendum, with the labour market remaining robust too. However a sharp fall in the pound is expected to push up prices early next year, eating into households’ purchasing power.
Sales of clothing and home hardware material enjoyed above average growth, but food and shoes sales dropped.
According to official data, British retail sales volumes excluding fuel rose at their fastest annual rate since November 2014 last month, growing by 5.9 percent.
The CBI survey was conducted between Aug. 25 and Sept. 14, and was based on response from 63 retail chains that account for about one third of employment in the sector.