British Retailers See Best Sales In Six Months

British shoppers have shrugged off uncertainty caused by the UK’s vote to leave the European Union with retail sales growing at their best level in six months in August, pushed by the summer weather and foreign visitors lured by a weaker pound, according to the latest survey sector by the Confederation of British Industry (CBI). The expected sales index was +3 for next month, up from -12 in August.

Retail sales unexpectedly improved in August, according to the CBI’s distributive trades survey, which also found companies were more confident about the outlook compared to last month.

The Confederation of British Industry’s headline gauge for retail sales rose to +9 this month, from -14 in July. However, sales volumes look set to be broadly flat over the next month.

The number of mortgages approved by British banks in July fell to its lowest in 18 months, data from the British Banker’s Association showed on Wednesday.

Investment intentions for the year ahead turned positive this quarter after remaining in the negative since 2013.

Retailers anticipate a further small improvement in their business situation, although sentiment is improving at a slower rate than over the past year.

Average selling prices fell (-5%) for the first time since last November.

“While the fall in sterling has boosted visitor numbers to the United Kingdom, it is likely to push up the price of imported goods over time which will mean households will be more likely to rein back spending on non-essentials”.

Economist Ruth Gregory at Capital Economics said the survey was “nothing to get excited about” and that the figures “still point to a slowdown in the official measure of retail sales growth after July’s strength”.

They are forecasting a 6.5% increase in footfall for the August Bank Holiday weekend, compared to previous year, due to the warm weather forecast and an increase in tourists due to the weak pound.

Springboard said the biggest increases in footfall are expected on the high street and in retail parks, of 7.3 per cent and 8 per cent respectively, as shoppers gravitate to these locations in good weather, but shopping centres are also predicted to welcome 3.5 per cent more visitors than this time a year ago.