Brexit: UK retail sales growth plunges at fastest rate in over a year, shows survey

Retailers said that they expect sales volumes to rebound next month, but they are generally downbeat about the current business situation

The survey also showed that employment has declined in the retail sector (Reuters)

Retail sales growth across the UK slowed at its fastest pace in over a year, new figures have revealed.

The Confederation of British Industry’s monthly retail sales survey, based on data from 57 retailers, showed that the retail sales balance slid to minus 10 this month, from plus 22 in July.

The reading undershoots economist forecasts and is the lowest since July last year, immediately after the UK voted to leave the EU.

Retailers surveyed said that they expect sales volumes to rebound next month, but they are generally downbeat on the current business situation.

Anna Leach, head of the CBI’s economic intelligence department, said that “higher inflation continues to squeeze consumers’ pockets”.

“Looking ahead, firms do expect sales growth to recover, but the pressures on household budgets are set to persist, given little sign of wages picking up,” she said.

The most recent official data shows that inflation was 2.6 per cent in July, up from just 0.6 per cent a year earlier, spurred by a slump in the pound.

On Thursday, figures from the Office for National Statistics showed that the UK economy expanded by 0.3 per cent in the three months to the end of June, unrevised from previous figures, meaning that the UK economy grew at just half the rate of the eurozone’s during the second quarter of the year.

The CBI survey showed that grocers saw stable sales on the year in August, and footwear and leather performed well too. Specialist food and drink stores reported a significant fall in sales, however.

Year-on-year internet sales growth slowed as well, edging further below the long-run average.

The survey also showed that employment declined in the retail sector in the year to August, at the fastest pace since August 2009. And a similar reduction in headcount expected next month, the CBI said.