Live, rolling coverage of business, economics and financial markets as European stock market rally fizzles outUK retail sales slumped for the 10th consecutive month in July, according to a survey of the biggest shops that underlined the weakness of Britain’s consumer spending.A third of retailers said that sales declined in July, according to a survey weighted by the size of the business, according to the Confederation of British Industry, a lobby group – although that was an improvement from the 46% balance who said sales had declined in June.Retail annual sales volumes continued to fall in July, although the pace of decline moderated from June’s sharp drop. Firms reported that elevated price pressures – driven by rising labour costs – and economic uncertainty continue to weigh on household demand, which has contributed to sales volumes falling since October 2024.These trends of weak demand and uncertainty were mirrored across the wider distribution sector, with wholesale and motor trades also seeing declining sales.However, this is thought to partly reflect the acceleration of business investment and purchase decisions by some companies in March, ahead of the implementation of US tariffs in April.After a strong start to the year, uncertainty in the global economy and international trade policy has continued to slow momentum. While the agreement struck with the US offers welcome relief to certain sectors and boosts the trading outlook, the UK’s access to a key export market is still reduced from where it was at the start of 2025, which is likely to weigh on growth.Business investment is expected to remain modest until 2027 and while interest rate cuts should reduce debt service costs and make financing cheaper, this will take time to materialise. Until then, businesses face a period of international uncertainty, alongside elevated labour and energy costs. Continue reading...

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