Retail sales see biggest quarterly fall in 7 years
Retail sales, a key indicator to consumer spending, is falling. As one economist points out, the expected slowdown in the economy has begun.
In a further sign that Britain’s economy is in decline following the vote to leave the EU, figures published today show that retail sales are falling at the fastest quarterly rate in seven years. The report by the Office for National Statistics (ONS) show sales fell by 1.4% in the three months to March 2017. This is also the first decline in quarterly sales and the first negative contribution of retail sales to GDP growth since 2013.
The ONS report also reflects the impact of rising inflation with average store prices showing an increase by 3.3% on the year. Speaking about the report, ONS senior statistician Kate Davies said “this is the first time we’ve seen a quarterly decline since 2013, and it seems to be a consequence of price increases across a whole range of sectors”.
“Clearest indication” that UK economy is slowing down
As Bloomberg reports, this doesn’t look good for an economy that “relies heavily on consumer spending”. With a weak pound, rising inflation and real wage growth falling, it was only a matter of time before we saw a decline in consumer spending too.
The Independent quotes PwC senior economic advisor Andrew Sentance as saying “this is the clearest indication yet that the expected slowdown in the UK economy has begun”.
This is the clearest indication yet that the expected slowdown in the UK economy has begun, and we should expect to see this confirmed in other economic data over the next few months.
Andrew Sentance, senior economic advisor at PwC
And this is just the beginning. Formal negotiations on Brexit haven’t begun and the prime minister appears determined to take Britain out of the EU, out of the single market and out of the jurisdiction of the European Court of Justice. All point to a hard Brexit. We now also have a general election to contend with because the prime minister doesn’t want opposition or scrutiny on her Brexit plans. But recent figures – on inflation, wage growth and retail sales show Brexit will hurt Britain. The general election is a chance for us to say this isn’t where we want to go.