Rapid fall in retail sales as inflation squeeze continues
Retail sales fell in August at the fastest pace since just after the Brexit vote as yet more clouds gather over Britain's economic prospects.
Soaring inflation linked to the collapse in the pound following the referendum contributed to a -10% reading on the CBI Distributive Trades Survey of 117 firms, down from +22 in July.
Anna Leach, head of economic intelligence at the CBI, said: "Despite the warmer weather at the start of the month, retail sales have cooled as higher inflation continues to squeeze consumers' pockets.
"Looking ahead, firms do expect sales growth to recover, but the pressures on household budgets are set to persist, given little sign of wages picking up."
Grocers saw stable sales year on year following strong growth last month, but specialist food and drink stores reported another month of significantly falling sales, the CBI said.
Since the Brexit vote triggered the pound's collapse, retailers have been grappling with a double whammy of rising import costs for goods and rapidly deteriorating consumer confidence.
Inflation is outstripping wage growth and hard pressed shoppers are cutting back on spending.
The pain is set to get much worse as the pound continues its descent, with sterling tipped to reach parity with the euro by the end of the year as the Conservatives continue to fumble Brexit trade talks.
As households cut back and Tory ministers fail to make progress on trade, the wider economy is suffering as a result.
It was confirmed today that the UK economy recorded the slowest second quarter growth out of the G7 group of nations.
To compound matters, the CBI survey also showed that employment declined in the retail sector in the year to August at the fastest pace since 2009, with a similar reduction in headcount expected next month.
"Retailers expect the business situation to continue to deteriorate over the next three months for the third quarter in a row," the CBI added.