New data shows that retail sales in the UK are taking a pre-Brexit nosedive, falling in August at the fastest pace since December 2008.
The Confederation of British Industry’s gauge of retailers, which is the difference between those reporting rising and falling sales, fell to -49 in August from -16 in July, the second weakest reading since CBI started recording the data in 1983.
“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, according to Reuters.
Data firm IHS Markit added that British working-age households are holding off on making major purchases due to concerns about Brexit and the possibility of the country falling into a recession. After the economy contracted in the second quarter of this year, it will enter a recession if it shrinks again in the July-September period.
The CBI survey also showed retailers cut orders with suppliers at a near-record pace.
“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.”
Earlier this week the UK’s Labour party revealed that it wants to give local authorities the power to take over vacant properties in an effort to give the country’s retail market a boost.
Around 11.8 percent of stores around the UK are currently vacant, according to the Local Data Company. In some towns, the rate is over 20 percent, with the highest figure coming in at 33 percent. An estimated 29,000 retail units have been vacant for 12 months.
Labour leader Jeremy Corbyn noted that the UK’s “once thriving high streets are becoming ghost streets” and boarded-up shops have become “a sorry symbol of the malign neglect so many communities have suffered.”