FX.co ★ UK Retail Sales Decline At Slowest Pace In 10 Months: CBI

Survey results from the Confederation of British Industry revealed that UK retail sales fell at a slower rate in February, marking the least severe dip in the ten-month run of relentless decreases. The retail sales balance bounced back to -7% in the year leading up to February, up from January's -50%. This bounce back was rather surprising, ranking much better than economists' prediction of -33%.

Although the improvement marks a welcome change, there is concern looming on the horizon as 15% of retailers foresee a slump in March sales. On top of this, the speed of selling price inflation has mitigated and reached a low unseen since May 2021. Over half of the retailers participating in the survey, pinned at 54%, reported increasing selling prices in February, a decline when compared to 73% in November. A similar statistic, 54%, predicts an annual spike in selling prices in the month ahead.

Despite these figures, retailers plan to slash capital spending in the forthcoming year. Nonetheless, looking on the bright side, investment plans don't look as dire as they've been in the last two years; this time they show the least negativity, as stated by the survey.

Speaking on the topic, Martin Sartorius, Principal Economist at CBI, commented that the downfall in retail activity underwent a slowdown in February after a particularly bleak beginning of 2022. However, Sartorius tactfully added a word of caution noting that expectations of declining sales next month imply that retailers will likely continue to reduce their staff count and investment in the days to come.