UK retail sales slump continues - CBI
By Frank Prenesti
Date: Thursday 24 Aug 2023
(Sharecast News) - British retail sales fell in August at their fastest rate in more 30 months with future prospects not looking much better amid the cost of living crisis, according to an industry survey published on Thursday.
The Confederation of British Industry's monthly balance of retail sales fell to -44 in the year to August from -25 in July. Expectations for the month ahead improved to -21 from -32.
"Against a backdrop of rising interest rates and weak demand, retailers foresee cuts to investment over the next year, while employment is expected to fall again next month," CBI economist Martin Sartorius said.
Retailers expect to reduce investment in the next 12 months (compared to the past 12), but to a lesser extent than in May, with a balance of -25% from -43%.
''August has been a washout for the high street as shoppers have turned increasingly cautious, with households' budgets facing a big squeeze. The CBI's snapshot of the retail scene shows darkening skies," said Hargreaves Lansdown analyst Susannah Streeter.
"Already, the Office for National Statistics retail sales reading for July showed a sharper drop than expected. Certainly, the wet weather hasn't been helping, but positive sentiment is not just being drowned out by the rain, but by the chill factor of higher interest rates."
"This further deterioration in retail sales does not bode well for the UK's growth prospects, given how dependent the economy is on our personal consumption of goods and services. Consumer spending is worth around 60% of GDP, so this deteriorating picture of retail sales is being seen as another sign that the UK is heading for a mild recession."
Reporting by Frank Prenesti for Sharecast.com
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