You are here
UK retail sales show little sign of post-Brexit vote slowdown
[LONDON] British retail sales softened only slightly in August after a bumper July, suggesting June's vote to leave the EU has had little impact on shoppers' willingness to spend, official figures showed on Thursday.
Spending by shoppers has been largely robust in the wake of June's referendum decision to leave the European Union, despite consumer sentiment initially suffering its sharpest monthly fall in a generation.
"Despite a small after July's sharp increase, the underlying pattern in the retail sector remains one of solid growth," ONS statistician Mel Richard said. "Overall the figures do not suggest any major fall in post-referendum consumer confidence."
Retail sales volumes edged 0.2 per cent down on the month in August after jumping an upwardly revised 1.9 per cent in July, the strongest July performance in 14 years. August's fall was smaller than the 0.4 per cent drop forecast by economists in a Reuters poll, the Office for National Statistics said.
Compared with a year earlier, sales volumes were up 6.2 per cent versus forecasts for a 5.4 per cent rise and 6.3 per cent growth recorded in July. Excluding fuel, August sales rose 5.9 per cent, the biggest rise since November 2014.
Spooked by initial signs of a big slowdown in economic activity, last month the Bank of England cut interest rates for the first time since 2009, and announced it would buy 60 billion pounds of government bonds over the next six months.
The BoE is not expected to change policy when it releases its September policy decision at 1100 GMT on Thursday, and expects consumer spending growth to halve next year in real terms as a post-Brexit inflation spike erodes disposable income.
In the meantime, British businesses are saying it is too early to judge the medium-term impact of June's vote.
In half-year results earlier on Thursday, Next, one of Britain's biggest clothing retailers, said sales since July had been volatile, with gains driven by heavy seasonal discounts.
Department store and supermarket chain John Lewis said the EU referendum had had little noticeable impact but that the full impact was not yet clear.
Although food sales gained on the month in August, the ONS figures showed the biggest monthly fall in non-food sales since December - something the statistics agency said could not be explained by patterns in seasonal discounts.
Sales of pricier household goods such as electrical appliances and hardware contracted year-on-year for the first time since May 2014.