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British retail sales crash in August as no-deal Brexit fears mount

British retail sales dropped this month at the fastest rate since 2008, according to a survey conducted by the business group CBI.

Retailers responding to the survey said that sales volumes had plummeted between July and August.

The gauge of retailers – which measures the difference between those reporting rising and falling sales volumes – collapsed to -49 from -16 in July.

It represents the second weakest reading since records began nearly four decades ago.

Howard Archer, chief economic adviser to the EY ITEM Club consultancy, pointed to growing worry among consumers over the possibility of a no-deal Brexit on 31 October.

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“The very weak August CBI survey raises the possibility that consumers are becoming more concerned and cautious as the UK’s 31 October departure date from the EU looms and expectations of a no-deal Brexit rise,” Mr Archer said.

Working-age British consumers have reportedly become more cautious about making large purchases amid concerns about Brexit and a possible recession, according to data firm IHS Markit released on Monday.

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The UK’s gross domestic product (GDP) contracted by 0.2% in the second quarter of this year, raising fears of a technical recession if GDP declines again in the third quarter.

Retailers slashed orders with suppliers at a near-record pace, according to the CBI survey.

“Sentiment is crumbling among retailers, and unexpectedly weak sales have led to a large overhang of stocks,” CBI deputy chief economist Anna Leach said.

Ms Leach added: “With investment intentions for the year ahead and employment down, retailers expect a chilly few months ahead.”

SOURCE : https://news.sky.com/story/british-retail-sales-crash-in-august-as-no-deal-brexit-fears-mount-11791278

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