British Retail Sales Reach Highest Slump in 6 Months

• Retail sales slump blamed on weather as clothing and footwear sales are the most affected

The fastest sales rate slump, which many believe to be the result of Britain’s fierce weather conditions was witnessed today when the retail sales data was released, while others assumed that this was more likely the aftermath of the Brexit.

Meanwhile there was a decline in budget deficit as it narrowed in June, which can mostly be blamed on the elevated income tax and VAT receipts, which was also reflected today in another report.

Food store sales fell 1.2% as non-food store sales also experienced a 0.8% decline in June.

This slide proves to be the largest fall seen this year so far, it also ended up outpacing the forecasted value of 0.6% by falling 0.9%.

“In June, bad weather dampened clothing sales”, the ONS stated, adding that a soggy start to the summer was a much bigger influencing factor than the Brexit.

The office of National Statistics (ONS) also revealed that the volume of month-to-month retail sales dropped by 0.9% in June, compensating for a previous 0.9% leap in May.

After seeing an increase in retail sales volume by 1.6% in the second quarter, up from the previous 3 months.

Economist Howard Archer stated that “the second quarter is more likely to witness the best GDP growth that the UK will post for some considerable time to come”. Also projecting that the UK will continuously labour for any economic advancement in the coming months as a growing confusion trailing the Brexit weighs down on businesses and consumers.

Given that the survey was carried out between May 29 and July 2, the period after the UK had voted to leave the EU, the ONS went on to assuage thoughts that the slumping retail sales is the result of the EU referendum, stating that the released data does not exactly reveal any major effects of the Brexit vote on the economy.

But many are of a different opinion arguing that the figures provides the first major reflection of the economy’s condition since the EU referendum, as they detailed retail sales recorded over the period following the Brexit.

ONS head of retail sales, Melanie Richard, also stated that: “All types of stores showed growth in June with the exception of clothing and footwear, which struggled again due to the changeable weather. But department stores continued to see strong sales compared with last June – boosted by events such as Father’s Day, the Euro 2016 football and the Queen’s official birthday.”

The yearly growth in retail sales which include auto fuel sales displayed its weakest performance in three months as it dropped more than the expected 5% to settle at a disappointing 4.3% from its previous 5.7% in May.

Since weaker public finances is a direct consequence of slower growth, analysts predict that there would be a growing weakness for public finances as the decision of the UK to leave the EU would ultimately result in tardy growth.