UK retail sales collapse at fastest pace since 2008 - CBI

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LONDON, Aug 22 (Reuters) - British retail sales plunged in
August at the fastest pace since December 2008, according to a
survey published on Thursday that added to signs of a slowing
economy ahead of Brexit in just over two months' time.
The Confederation of British Industry's gauge of retailers -
or the difference between those reporting rising and falling
sales volumes - slumped to -49 in August from -16 in July, the
second weakest reading since records began in 1983.
That was worse than all forecasts in a Reuters poll of
economists that pointed to an improvement to -11.
Until recently, consumers had largely taken Brexit in their
stride, helped by wages growing at the fastest pace in more than
a decade and modest inflation.
That helped to support growth at a time when many companies
have been cutting back on investment because of uncertainty
about Brexit, but left the economy reliant on consumer spending.
"The very weak August CBI survey raises the possibility that
consumers are becoming more concerned and cautious as the UK's
Oct. 31 departure date from the EU looms and expectations of a
'no deal' Brexit rise," said Howard Archer, chief economic
adviser to the EY ITEM Club consultancy.
Britain's economy contracted in the second quarter of the
year and would enter a recession if it shrinks again in the
July-September period.
Official retail sales data have painted a more upbeat
picture than most other private sector surveys including the
CBI's, although some gauges of consumer morale are starting to
weaken.
Data firm IHS Markit said on Monday that British working-age
households were growing more cautious about making major
purchases amid concerns about Brexit and a possible recession.

The CBI survey showed retailers cut orders with suppliers at
a near-record pace and built up stocks.
"Sentiment is crumbling among retailers, and unexpectedly
weak sales have led to a large overhang of stocks," CBI deputy
chief economist Anna Leach said.
"With investment intentions for the year ahead and
employment down, retailers expect a chilly few months ahead."


(Reporting by Andy Bruce
Editing by William Schomberg and Gareth Jones)


First Published: 2019-08-22 12:01:51
Updated 2019-08-22 14:20:33


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