British retail sales fall more sharply than expected; World Bank warns of global recession – business live

Risk of UK recession heightens, while World Bank says consumer confidence has already dropped more sharply than in the run-up to previous global recessions

“Shoppers are simply buying less to offset price increases,” says Lisa Hooker, industry leader for consumer markets at PwC. She explains:

For the first time, grocery sales volumes, taking out the impact of the inflation, actually fell below pre-pandemic levels, showing that shoppers are wasting less and being forced to be more careful with what they put in their trolleys.

Other categories like fashion also fell below pre-pandemic levels, despite its resurgence earlier in the summer as consumers rushed to buy new outfits for the workplace and celebrations and events postponed from the pandemic.

Retail sales will probably continue to struggle as the cost of living crisis hits harder in the coming months. But nonetheless the Bank of England will still have to raise interest rates aggressively.

The fall in retail sales in August more than reverses the upwardly revised 0.4% monthly rise in July. Sales volumes fell in every major category and the ONS reported that high prices were prompting households to reign in their spending. And this sits comfortably with the fall in consumer confidence to its lowest level on record in August. For example, fuel sales fell 1.7% despite a sharp 6.2% decline in fuel prices in August.

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