British retail sales volumes slid in January at the fastest pace for three years, according to an industry survey which echoed weak official data published last week.
The Confederation of British Industry's (CBI) monthly retail sales balance, a gauge of sales versus a year ago, fell in January to -50 from -32 in December, the lowest reading since January 2021 when Britain was in a COVID-19 lockdown.
The survey pointed to an equally dismal February.
During the survey's 40-year history, the retail sales balance has fallen as low as -50 only during the COVID-19 pandemic and the 2008-09 global financial crisis.
Strain From Price Rise
While Thursday's report is the latest sign that retailers are still feeling the strain from the rise in prices and interest rates over the last two years, other surveys have painted a healthier picture of the wider business economy.
"Looking ahead, demand conditions in the (retail) sector will remain challenging as higher interest rates continue to feed through to mortgage payments and household incomes," said Martin Sartorius, CBI principal economist.
The survey covered 52 retailers between 21 December 2023 and 15 January 2024.
Official data published last week showed British retailers suffered the biggest drop in sales for almost three years during December, raising the risk that the economy slipped into recession late last year.
According to AJ Bell investment analyst Dan Coatsworth, retailers in the UK will continue to face a slowdown in sales growth in 2024, with consumer confidence remaining fragile and competition intense.
Read More: Four Challenges Facing UK Retailers In 2024: AJ Bell
