Retail sales fell sharply last month hit by rising prices and the ensuing cost-of-living crisis.
According to the Office for National Statistics, in seasonally-adjusted terms, total retail sales volumes in the UK fell at a month-on-month pace of 1.6% in August (consensus: -1.4%), following a rise of 0.4% in July.
It was a similar story in year-on-year terms with sales down by 5.4%, versus a 3.4% decline in July (consensus: -3.7%).
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, linked the drop in sales to the “extremely low” level of consumer confidence, adding that it should steer the Monetary Policy Committee towards a 50bp hike in Bank Rate.
That was in contrast to the 75bp hike seen as most likely by financial markets.
Furthermore, “weakness likely won’t be sustained, given the additional support from the government,” Dickens said.
Non-food store sales fell by 1.9% on the month, those at food stores by 0.8% and non-store sales by 2.6%.
The drop in food sales suggested Britons were tightening their belts in response to the surge in food prices, she added.
Automotive fuel sales volumes were down by 1.7% on the month.
