Another post-Brexit vote survey and yet more gloom over the direction of the UK economy.
Retail sales, as measured by a regular survey carried out by business lobby group the CBI, have slumped at their fastest pace since January 2012 this month, with orders placed with suppliers deteriorating by their worst level since the financial crisis.
The CBI’s headline retail sales balance registered -14 in July, compared to +4 in June.
The balance represents the difference between the percentage of retailers reporting an increase and those reporting a decrease in activity. Economists had expected a small +1 reading ahead of the release.
A breakdown of the survey of 132 firms shows:
- Orders placed with suppliers hit -34, the lowest since March 2009
- Wholesale volumes declined at fastest pace since April 2013
- 42 per cent of retailers placed fewer orders than at the same time last year
- Grocers suffered a 30 per cent drop in sales volumes; furniture and carpets retails fell 90 per cent
It comes after GDP data – which covered the three months leading up to, and including the referendum – showed the UK economy was in good nick in the second quarter, growing by 0.6 per cent.
But the CBI’s retail sales survey paints a similar picture to other poor post-referendum indicators, which suggest a sharp deterioration in private sector activity and the lowest level of business confidence since the financial crisis.
Rain Newton-Smith, chief economist at the CBI, said analysts should be wary about “reading too much too soon” into the figures.
“Consumers were likely to err on the side of caution in the immediate period following a vote to leave the EU”, she said, adding:
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.