British retail sales fall more sharply than expected; World Bank warns of global recession – business live

Key events 1h ago Introduction: British retail sales fall sharply; World Bank warns of global recession Filters BETA Key events ( 1 ) 46m ago 02. 48 “Shoppers are simply buying less to offset price increases,” says Lisa Hooker, industry leader for consumer markets at PwC. She explains: .

css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} For the first time, grocery sales volumes, taking out the impact of the inflation, actually fell below pre-pandemic levels, showing that shoppers are wasting less and being forced to be more careful with what they put in their trolleys. Other categories like fashion also fell below pre-pandemic levels, despite its resurgence earlier in the summer as consumers rushed to buy new outfits for the workplace and celebrations and events postponed from the pandemic.

As we approach the critical Golden Quarter in the run up to Christmas, retailers will be looking with anticipation to the outcome of next week’s mini-budget. The confirmation of an energy price cap and possibility of tax cuts may boost wavering consumer spending, but businesses will also be looking for help to alleviate soaring utility costs of their own. That’s in addition to the input cost inflation and wage rises that they are already having to contend with.

Longer term, the high street will also be looking for signs of reform of business rates, with index-linking likely to offset any revaluation benefit, and adding to costs from next year. Retail Sales in the United Kingdom decreased 1. 60 percent in August of 2022 over the previous month.

https://t. co/EwoFoJWCbm pic. twitter.

com/mi5PXddhIt — Trading Economics (@tEconomics) September 16, 2022 55m ago 02. 39 The sharp drop in British retail sales suggests that “the economy is already in recession,” says Olivia Cross, assistant economist at Capital Economics. .

css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} Retail sales will probably continue to struggle as the cost of living crisis hits harder in the coming months. But nonetheless the Bank of England will still have to raise interest rates aggressively.

The fall in retail sales in August more than reverses the upwardly revised 0. 4% monthly rise in July. Sales volumes fell in every major category and the ONS reported that high prices were prompting households to reign in their spending.

And this sits comfortably with the fall in consumer confidence to its lowest level on record in August. For example, fuel sales fell 1. 7% despite a sharp 6.

2% decline in fuel prices in August. With CPI inflation yet to peak, it will continue to squeeze real incomes and weigh on consumer spending in the coming months. That said, the potentially huge fiscal expansion from the government’s Energy Price Guarantee will offer substantial support to households and consumer spending further ahead.

We now expect that the recession will be smaller and shorter than we did before, which is one reason why we expect that the Bank of England will need to raise interest rates further than we had been expecting to a peak of 4. 0% (previously 3. 0%, consensus 2.

5%). Updated at 02. 42 EDT 1h ago 02.

36 The World Bank also warned that the global core inflation rate, excluding energy, could remain at about 5% next year, nearly double the five-year average before the pandemic, unless supply disruptions and labour market pressures subside. To drive inflation lower, central banks may need to raise interest rates by an additional 2 percentage points, on top of the two-point increase already seen, it said. But an increase of that magnitude, coupled with financial market stress, would slow global GDP growth to 0.

5% in 2023, or a 0. 4% contraction in per capita terms, which would meet the technical definition of a global recession. Malpass urged policymakers to shift their focus from reducing consumption to boosting production, including efforts to generate additional investment and productivity gains.

Previous recessions illustrated the risk of allowing inflation to stay elevated for long while growth is weak, the Bank said, noting that the 1982 recession triggered more than 40 debt crises and ushered in a decade of lost growth in many developing economies. World Bank vice president Ayhan Kose said the recent tightening of monetary and fiscal policies would help tame inflation, but because this is happening simultaneously in several countries, this could worsen the global growth slowdown. The report suggested that central banks could combat inflation without triggering a global recession by communicating their policy decisions clearly, and also called for credible medium-term fiscal plans and more targeted relief for vulnerable households.

David Malpass, president of the World Bank Group. Photograph: Issei Kato/Reuters 1h ago 02. 24 Introduction: British retail sales fall sharply; World Bank warns of global recession Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

Retail sales volumes in Great Britain slumped by 1. 6% in August from July – much worse than expected. Economists had expected a 0.

5% drop. The sharp decline came after an upwardly revised 0. 4% rise in July.

The Office for National Statistics, which released the figures, said all main sectors (food stores, non-food stores, online retail, and fuel) fell over the month; this last happened in July 2021, when all legal Covid restrictions on hospitality were lifted and people headed out to bars and restaurants. Retail sales in Great Britain Photograph: ONS Sales at supermarkets and other food stores were down 0. 8% in August, which leaves them 1.

4% below their pre-pandemic levels in February 2020. However, alcohol and tobacco sales rose, by 6. 3%, as people sought relief from the cost of living crisis.

Petrol and diesel sales fell 1. 7%, despite a fall in prices. Sales at department stores fell by 2.

7%, while household goods stores posted a 1. 1% fall, mainly because of declines in furniture and lighting stores. Feedback from retailers suggests that consumers are cutting back on spending because of increased prices and affordability concerns.

At clothing stores, sales volumes fell by 0. 6% in August and were 5. 7% below their February 2020 levels.

The proportion of retail sales online fell to 25. 7% from 26. 3% in July; but it remains significantly above pre-coronavirus levels, when it was 19.

8%. The world looks to be edging toward a global recession as central banks are forced to hike interest rates to fight high inflation, the World Bank has warned. The world’s three largest economies – the United States, China and the eurozone – have been slowing sharply, and even a “moderate hit to the global economy over the next year could tip it into recession,” the bank said in a new study.

It said the world economy was now in its steepest slowdown following a post-recession recovery since 1970, and consumer confidence had already fallen more sharply than in the run-up to previous global recessions. Expressing concerns that these trends would persist, with damaging consequences for emerging market and developing economies, World Bank President David Malpass said: . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} Global growth is slowing sharply, with further slowing likely as more countries fall into recession. The Agenda 10am BST: Eurozone inflation for August, final estimate (forecast: 9. 1%) 10am BST: Italy inflation for August, final estimate (forecast: 8.

4%) 3pm BST: US Michigan consumer sentiment for August Updated at 02. 47 EDT Topics Business Business live Stock markets Retail industry Commodities Reuse this content.