LONDON – British retail sales tumbled by far more than expected in August, data showed today, as shoppers tightened their belts in the face of a cost of living crisis, sparking fresh recession fears.
Sales by volume dived 1.6% last month, the Office for National Statistics said in a statement, noting that the falls were broad-based.
That was significantly worse than market expectations of a 0.5% decline, following an upwardly-revised 0.4% increase in July.
The Bank of England (BoE) has already forecast a UK recession starting this year on the back of rocketing inflation.
“The 1.6% drop in retail sales volumes in August supports our view that the economy is already in recession,” said economist Olivia Cross at consultancy Capital Economics.
“Retail sales will probably continue to struggle as the cost of living crisis hits harder in the coming months.”
Inflation eased in August to 9.9% after striking a 40-year peak of 10.1% in July but remains at an elevated level.
The BoE is forecast next Thursday to hike interest rates once again in a bid to tackle rampant consumer prices, which have been fuelled by spiking food and domestic energy costs.
The British central bank’s latest monetary decision had originally been due this week but was delayed until after the funeral of Queen Elizabeth II.
New British Prime Minister Liz Truss last week launched a two-year freeze on domestic electricity and gas prices in an attempt to cushion the nation’s soaring cost of living. – AFP, September 16, 2022
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