Brexit Britain, from an economic point of view, is a little like the story of the Boy Who Cried Wolf in as much as the nigh apocalyptic economic consequences of a vote to leave the world’s largest trading bloc have not come to pass (yet). Experts who did predict a visitation of a member (or a pack) of the family canis lupus are quick to point out that the UK has not left the EU yet, nor has it given official notification of its intention to do so.
The buoyancy of the post vote UK economy has caught many analysts off guard, but any serious observer would say that an economic downturn is not a case of “if”, but “when”. In this light, the fact the UK retail sales in January fell when they were expected to grow could be a sign of the storm to come (then again…).
Retail sales volume fell in January by 0.3% on the December level whereas analysts had expected to see them rise by 0.9%, according to data from the Office for National Statistics (ONS). The December figure was a dip in retail sales itself and consequently, there is evidence of the underlying trend of softening retail sales which is the first such declining trend since December 2013.
ONS believes that increased costs for fuel and food played a part in the unexpected decline. Year-on-year, the January 2017 figures were up by 1.5% on the previous year, but this is the weakest performance seen for annualised data since November 2013. The fuel price saw a whopping 16.1% increase in January which was the biggest monthly hike seen since September 2011. Other data from ONS indicated that inflation is running at a 30-month high and wage growth is easing. Time will tell if this is the start of “project fear” over Brexit morphing into “project told you so”, but polling of UK leave voters suggest that they would not support Brexit if it hit their pockets significantly.