Confidence falls to lowest level since Feb 2009
Retail sales were flat in August as sentiment deterioriates sharply, says CBI study
Business confidence fell sharply to its lowest level in over three years as retail sales were flat in August, the latest survey showed on Thursday, increasing pressure on an already troubled government.
The CBI’s latest quarterly distributive trades survey showed a balance of -3 percent in sales, in line with expectations.
Retailers said they expected the business outlook to deteriorate over the next three months with sentiment weakening more than at any time since February 2009.
All but one of the retail sectors in the study reported a slowdown in the pace of yearly sales growth, the CBI said. Only the footwear and leather sub-sector bucked the trend with a modest acceleration in growth in July.
Employment figures fell on a year ago and retailers said they expected to cut more jobs in the coming month, the study showed. Retailers also said they’d curbed investment plans.
Retail orders placed with suppliers fell on last year at their fastest rate since January and shop price inflation fell considerably to its lowest level in almost three years. Retailers expect to raise prices next month.
There has been a mixed picture from business surveys in recent months despite the economy in its second recession in four years. The latest offical data showed a rise in retail sales in July boosted by the Olympics adding to government hopes that an upturn was around the corner so the CBI data will disappoint the government which desperately needs some good news.
Another study this week showed that business are putting off investment decisions due to the double dip recession and unclear outlook.
“Although this summer’s events created a mood of celebration across the nation, these figures would suggest this positivity did not extend to the high street," Judith McKenna, ASDA chief operating officer and chair of the CBI distributive trades panel said.
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