You are here
UK retailers saw biggest fall in sales in 4 years after Brexit vote
[LONDON] British retailers suffered the sharpest fall in sales in four years following the June 23 vote to leave the European Union, the Confederation of British Industry said on Wednesday.
Stores have also cut orders with suppliers by the most since the 2008-09 financial crisis because they expect a further fall in demand in August, the CBI said - though it cautioned against drawing too strong conclusions from the figures.
"While conditions in the retail sector have weakened, we should be careful about reading too much too soon, as consumers were likely to err on the side of caution in the immediate period following a vote to leave the EU," CBI chief economist Rain Newton-Smith said.
The data represents an early gauge of how the retail sector has fared since the unexpected vote to leave the EU. Surveys of manufacturers and services firms last week suggested the economy is shrinking at the fastest pace since the financial crisis.
The numbers cover the period from June 28 to July 14, when Britain's Conservative Party was in the process of selecting a permanent successor to former prime minister David Cameron, who said after the vote that he would resign.
The CBI said its retail sales volume index for July fell to -14 from +4 in June, its lowest since January 2012. Expected sales for August were also the lowest since then.
Orders placed with suppliers fell at the sharpest rate since March 2009 and were expected to decline rapidly in August too.
Low inflation and high employment levels might help sales bounce back in the short run, but in the medium term the big fall in sterling would push up prices, the CBI said.
"What businesses and consumers need now is calm and decisive leadership, a clear timetable and a plan for negotiating the UK's future outside the EU to restore confidence," Ms Newton-Smith said.