Forexpros – Retail sales in the U.K. fell unexpectedly in July, dropping to the lowest level since June 2010 as shoppers reined in spending in the face of rising food and petrol prices, industry data showed on Thursday.
In a report, the Confederation of British Industry said the result of its index of U.K. retailers fell by 3 points to minus 5.0 in July from a reading of minus 2.0 in June.
Analysts had expected the index to climb to 2.0 in July.
On the index, a reading above zero indicates higher sales volume, below indicates lower.
The decline was driven by the first fall in grocers’ sales volumes in 30 months. Sales of footwear & leather, durable household goods and hardware also fell sharply.
Commenting on the report, Chair of the CBI Distributives Trade Panel Judith McKenna said, ““Rising prices, especially for fuel, continue to impact consumer confidence and make life tough on the high street.”
“With consumer confidence fragile, UK retailers continue to face challenging times,” she added.
Following the release of the data, the pound was down against the U.S. dollar, with GBP/USD easing down 0.09% to trade at 1.6316.
Meanwhile, European stock markets were sharply lower. The FTSE 100 slumped 0.75%, the EURO STOXX 50 dropped 1.2%, France’s CAC 40 sank 1.3%, while Germany’s DAX tumbled 1.6%.
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