European retail sales below expectations

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Britain’s retail sales fell more than expected in August, another sign the economy is slipping into recession as the cost-of-living crisis squeezes disposable household spending, Reuters reports.

Retail sales fell 1.6% month-on-month in August, the Office for National Statistics said, the biggest drop since December 2021 and worse than all forecasts in a Reuters poll of economists. which had indicated a decrease of 0.5%.

The data could add to concerns about the strength of demand in the UK economy.

UK fashion retailers Primark and ASOS and online supermarket Ocado Retail have all warned about their profits this month.

The lira fell even more, to 1.14 dollars per unit, following these data.

“With a tough winter ahead, retailers will be concerned that shoppers have already cut back on spending despite the hot summer,” said Lynda Petherick, retail director at Accenture.

All the main retail sectors, namely food stores, non-food stores, non-store retail and fuel, fell during August for the first time since July 2021 when Covid-19 restrictions on hospitality were lifted , said the ONS.

Mourning amplifies pessimism

The period of mourning following the death of Queen Elizabeth presents another challenge for retailers, with widespread business closures due on Monday to mark the Queen’s funeral.

“The gloomy atmosphere in the UK this week and news of sluggish economic growth will add to the sense of worry among retailers as the weather turns colder,” said Petherick.

Although inflation fell below 10% last month, households are still facing the biggest price increases since the early 1980s, mainly caused by rising energy prices following Russia’s invasion of Ukraine.

The ONS said that people cut back on furniture purchases last month.

“Feedback from retailers suggests that consumers are cutting back on spending due to higher prices and affordability concerns,” the ONS report says.