Five questions answered on the drop in UK retail sales in August

Why the fall?

According to figures from the Office of National Statistics (ONS) retail volumes fell in August despite analysts expecting a rise. We answer five questions on the surprise drop.

By how much did retail sales fall in August?

They fell by 0.9 per cent according to the ONS. This was a surprise for analysts who expected a 0.4 per cent increase.

What’s responsible for the fall?

The ONS said the fall was due to consumers reining in spending, particularly on food.

Sales of food fell by 2.7 per cent in August compared with the month before.

Morrisons last week said higher levels of spending it had seen in London were not reflected in other parts of the country.

How do August’s figures compare to last year?

These latest figures, which are based on a monthly survey of 5,000 UK retailers including all large retailers who employ 100 people or more, are still up on the same time last year.

They’re 2.1 per cent higher than August last year, when the Olympics affected spending.

What does this all mean in relation to the economy?

Retail figures are considered an indicator of consumer confidence and the economy as a whole. The retail sector actually accounts for around 6 per cent of the UK economy.

However, according to latest estimates the economy grew by 0.7 per cent in the second quarter of the year.

What do the analysts say?

David Tinsley, UK economist at BNP Paribas, speaking to the BBC said:

"It is probably a sign that upbeat expectations were getting a little out of whack with what the economy is capable of delivering," he said.

"If there is an ex-post rationale for the decline in sales, it seems to be largely down to the weather. Food sales were exceptionally strong in July... as the temperature improved markedly. While August was also pleasant, that level of sales was probably difficult to sustain."

Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

Photo: Getty
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Who will win the Copeland by-election?

Labour face a tricky task in holding onto the seat. 

What’s the Copeland by-election about? That’s the question that will decide who wins it.

The Conservatives want it to be about the nuclear industry, which is the seat’s biggest employer, and Jeremy Corbyn’s long history of opposition to nuclear power.

Labour want it to be about the difficulties of the NHS in Cumbria in general and the future of West Cumberland Hospital in particular.

Who’s winning? Neither party is confident of victory but both sides think it will be close. That Theresa May has visited is a sign of the confidence in Conservative headquarters that, win or lose, Labour will not increase its majority from the six-point lead it held over the Conservatives in May 2015. (It’s always more instructive to talk about vote share rather than raw numbers, in by-elections in particular.)

But her visit may have been counterproductive. Yes, she is the most popular politician in Britain according to all the polls, but in visiting she has added fuel to the fire of Labour’s message that the Conservatives are keeping an anxious eye on the outcome.

Labour strategists feared that “the oxygen” would come out of the campaign if May used her visit to offer a guarantee about West Cumberland Hospital. Instead, she refused to answer, merely hyping up the issue further.

The party is nervous that opposition to Corbyn is going to supress turnout among their voters, but on the Conservative side, there is considerable irritation that May’s visit has made their task harder, too.

Voters know the difference between a by-election and a general election and my hunch is that people will get they can have a free hit on the health question without risking the future of the nuclear factory. That Corbyn has U-Turned on nuclear power only helps.

I said last week that if I knew what the local paper would look like between now and then I would be able to call the outcome. Today the West Cumbria News & Star leads with Downing Street’s refusal to answer questions about West Cumberland Hospital. All the signs favour Labour. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.