- Rain Newton-Smith, director of economics at the CBI
Activity in the UK retail sales sector cooled in February for the second month in a row, and retailers' expectations for sales in the coming months eased to the lowest level since 2013. Retail sales declined this month as the overall balance measuring volumes dropped to 10% from 16% in January, compared with economists' forecast for 12%. A measure of expected sales for the month ahead slid to 2% from 10%, hitting the lowest level since May 2013, while the report also revealed retailers expect to scale back investment spending slightly in the foreseeable future. Nevertheless, low inflation, increased consumer confidence and promotions are likely to continue supporting the retail sector and overall household spending. Inflation in Britain remains subdued at 0.3%, and is predicted to climb only at a very slow pace as low commodity prices and cheaper imports put downward pressure on the headline measure.
With intensifying talks over Brexit, analysts are weighing what effect the potential UK's exit from the European Union might have. The high-profile fund manager Neil Woodford said that the long-term economic implications may not be as severe as some have estimated, but regardless of the outcome of the 23 June referendum, the effect would be profound.
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