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UK retail sales dropped in August compared to the previous month but still held up better than forecast, adding to a run of better-than-expected economic data since Britain’s vote to leave the EU.
Sales, excluding petrol, fell 0.3 per cent last month compared to July but were 5.9 per cent higher than the same month a year earlier. That marked the biggest year-on-year percentage increase since November 2014.
Economists had been expecting monthly sales, excluding petrol, to drop 0.7 per cent following an unexpectedly strong 2.1 per cent jump in July, the first full month after the Brexit vote. The Office for National Statistics had previously estimated a 1.5 per cent increase for July but that was revised up on Thursday to 2.1 per cent.
“Despite a small fall after July’s sharp increase, the underlying pattern in the retail sector remains one of solid growth. There was some variation between different sectors but overall the figures do not suggest any major fall in post-referendum consumer confidence,” said the ONS.
The year-on-year increase in sales, excluding petrol, last month was also higher than the 4.8 per cent forecast by economists and a pick-up from 5.8 per cent annual growth in July.
Including petrol, sales by volume fell 0.2 per cent month-on-month but were 6.2 per cent higher than August 2015. The ONS said all store types except textile, clothing and footwear, plus household goods, showed growth compared to the same period last year, with the main contribution coming from food stores.
All data since the referendum on June 23 are being closely scrutinised to assess how the economy will be affected by Britain’s vote to leave the EU.
So far, data has been generally better than expected but a number of economists remain concerned that the UK economy will experience a period of weaker growth as the process to extricate Britain from the EU gets underway. The UK government is expected to trigger the Article 50 “divorce clause” at some point in the first half of next year.