The strong recovery on Britain’s high streets after last year’s Brexit vote appears to be over, with retail sales figures for the first quarter showing the biggest drop in purchases in the last seven years.
The Office for National Statistics said UK retail sales fell 1.4% in the first three months of 2017, the biggest quarterly fall since 2010.
Evidence of a steep decline in recent months was emphasised by the month-on-month figure, which has fallen for the last five consecutive months and declined by 1.8% in March (or by 1.5% when fuel sales were excluded).
A dry spell for the housing market – which has had almost a year of lacklustre sales, according to surveyors’ body Rics – was blamed for a steep fall in sales of household goods and furniture.
The slump comes as the political parties fire their opening salvoes in the general election campaign. Theresa May has indicated she will focus on her ability to deliver the benefits of Brexit, in part from the lower value of the pound.
Analysts said consumers were less willing to spend now the impact of weaker sterling was translating into higher shop prices. The pound is 14% lower against the dollar than it was on the day of the referendum in June when the UK voted to leave the European Union.
Weaker sterling makes goods imported from abroad more expensive, which is a big blow to the retail sector when Britain imports most of its food and runs a large deficit in goods with the rest of he world.
Kate Davies, senior statistician at the ONS, said prices were rising across the board. Average shop prices (including fuel) increased by 3.3% in the year to March, which was the sharpest rate of growth since March 2012.
The biggest contribution came from petrol stations, where average prices rose by 16.4% year-on-year.