UK retail sales plunge to six-month low as poor weather hurt clothing sales

Retail sales in the United Kingdom plunged to six-month low during the month of June as poor weather kept consumers away from shopping clothes. However, the fallout of Brexit is unlikely to have had any impact on the poor retail figure.

The volume of goods sold in stores and online dropped 0.9 percent, data released by the Office for National Statistics showed Thursday. It remained more than the 0.6 percent decline seen in a Bloomberg survey of economists. Further, sales excluding auto fuel also fell a larger-than-expected 0.9 percent.

Moreover, food sales fell 1.2 percent, while non-food sales dropped 0.8 percent. Sales at department stores dropped 1.6 percent and clothing and footwear retailers saw sales decline 1.8 percent. Compared with a year earlier, June sales growth slowed to 4.3 percent from a robust 5.7 percent in May, a bigger decline than the easing to 5.0 percent forecast.

While departmental stores witnessed a boost in sales, following the Euro 2016 soccer tournament and Queen Elizabeth's 90th birthday, clothing sector suffered owing to another round of poor weather that prevailed. However, the monthly survey was carried out between May 29 and July 2, which meant that some responses included the June 23 referendum period.

In addition, public borrowing in June fell to 7.8 billion pounds from 10.0 billion a year earlier, a much bigger fall than the drop to 9.2 billion which economists had forecast. Borrowing for the three months to June was 8.3 percent lower than a year earlier.

Moreover, Britain suffered a budget deficit of around 4 percent of gross domestic product in the 12 months to March, down from more than 10 percent in 2010 but still among the highest of rich nations around the world.

Meanwhile, the Bank of England said on Wednesday that while businesses showcased little change in spending patterns, a private survey by GfK showed that consumer confidence fell sharply in over 20 years.