Retail sales fall harder than expected, adding to recession fears

UK retail sales fell significantly more than forecast during August, as the cost of living reduces households’ disposable income. Sales volumes dropped 1.6% month-on-month according to figures from the Office for National Statistics, the biggest fall since December 2021.

The news comes in a month that UK fashion retailers ASOS, Primark, and online supermarket brand Ocado have all warned about upcoming profits.

The ONS said that all of the main retail sectors – including food, non-food, non-store retailing and fuel – fell over the month for the first time since July 2021 when Covid-19 restrictions on hospitality were lifted.

The additional closures brought about by the Queen’s funeral Bank Holiday on Monday 19 September could add further challenges to businesses within the sector.

Compounding concerns over the economic outlook was the news that the pound fell to its lowest since 1985, dropping 0.8% in Friday morning trading in London to US$1.137, the first time it has gone below US$1.14 in almost four decades according to data from Refinitiv.

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