Retailers Experience Record Sales Dip In August

British retailers experienced a record slump in sales during August, with the sharpest annual drop in around 25 years.

The continued contraction in the property market, coupled with poor summer weather, contributed to the record velocity in decline, according to an industry report.

A distributive trades survey, undertaken by the Confederation of British Industry, found the balance fell to -46, the lowest since the series began in 1983, from -36 in July.

Retailers across the UK have projected further gloom for September, with a predicted series low of -42 for the month.

CBI Survey Panel Chair, Andy Clarke, said: "This has been a summer that many retailers would rather forget. The downturn in the housing market is continuing to depress sales for those shops selling big-ticket items."

Commentators have suggested retailers will still increase market prices sharply, however, this is expected to occur at a slower rate.

The CBI's announcement comes amid the Bank of England's suggestion, earlier this week, that UK economic growth stalled in the second quarter of this year.

Despite the fastest inflation in a decade and the most significant house-price falls since the early 1990s, the bank has still appeared reluctant to lower interest rates, in order to strengthen growth.

The Bank of England kept borrowing costs unchanged at 5% in August.

(PR/JM)