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

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Labour tensions boil over at fractious MPs' meeting

Corbyn supporters and critics clash over fiscal charter U-turn and new group Momentum. 

"A total fucking shambles". That was the verdict of the usually emollient Ben Bradshaw as he left tonight's Parliamentary Labour Party meeting. His words were echoed by MPs from all wings of the party. "I've never seen anything like it," one shadow minister told me. In commitee room 14 of the House of Commons, tensions within the party - over the U-turn on George Osborne's fiscal charter and new Corbynite group Momentum - erupted. 

After a short speech by Jeremy Corbyn, shadow chancellor John McDonnell sought to explain his decision to oppose Osborne's fiscal charter (having supported it just two weeks ago). He cited the change in global economic conditions and the refusal to allow Labour to table an amendment. McDonnell also vowed to assist colleagues in Scotland in challenging the SNP anti-austerity claims. But MPs were left unimpressed. "I don't think I've ever heard a weaker round of applause at the PLP than the one John McDonnell just got," one told me. MPs believe that McDonnell's U-turn was due to his failure to realise that the fiscal charter mandated an absolute budget surplus (leaving no room to borrow to invest), rather than merely a current budget surplus. "A huge joke" was how a furious John Mann described it. He and others were outraged by the lack of consultation over the move. "At 1:45pm he [McDonnell] said he was considering our position and would consult with the PLP and the shadow cabinet," one MP told me. "Then he announces it before 6pm PLP and tomorow's shadow cabinet." 

When former shadow cabinet minister Mary Creagh asked Corbyn about the new group Momentum, which some fear could be used as a vehicle to deselect critical MPs (receiving what was described as a weak response), Richard Burgon, one of the body's directors, offered a lengthy defence and was, one MP said, "just humiliated". He added: "It looked at one point like they weren't even going to let him finish. As the fractious exchanges were overheard by journalists outside, Emily Thornberry appealed to colleagues to stop texting hacks and keep their voices down (within earshot of all). 

After a calmer conference than most expected, tonight's meeting was evidence of how great the tensions within Labour remain. Veteran MPs described it as the worst PLP gathering for 30 years. The fear for all MPs is that they have the potential to get even worse. 

George Eaton is political editor of the New Statesman.