Key insights
- UK retail sales experienced a sharp decline in March, the largest since April 2020, according to the CBI. Weak economic conditions and rising petrol prices due to the Middle East conflict are weighing on household spending. While the direct impact on US equities is limited, it signals potential global economic slowdown and inflationary pressures, indirectly affecting multinational corporations and investor sentiment.
LONDON, March 24 (Reuters) - British retail sales have tumbled this month by the most since April 2020 when most non-food shops were closed at the start of the COVID-19 pandemic, a survey showed on Tuesday.
The Confederation of British Industry’s said its monthly gauge of retailers’ annual change in sales volumes sank to -52 in March from an already weak -43 in February, and businesses expected only a marginal improvement to -49 in April.
"Retailers report that weak economic conditions continue to weigh on household spending, with subdued activity also evident across the broader distribution sector," CBI Lead Economist Martin Sartorius said.
The survey of 50 retail chains took place between February 25 and March 13, mostly falling after the start of the U.S.-Israeli war on Iran.
The conflict has pushed up petrol prices in Britain and the Bank of England expects it will increase broader inflation later this year.
The survey did not directly attribute the fall in sales to the conflict. The CBI said it increased the necessity for the government to ease the cost impact to businesses from new employment rights and tax.
"The conflict in the Middle East - which risks fuelling price pressures and squeezing household budgets - underscores the need for the government to take further action to lower the cost of doing business for distribution firms," Sartorius said.