UK retail sees biggest fall in 6 months

Bloomberg

UK retail sales had their biggest drop in six months in June, adding to signs that the vote to leave the European Union is starting to bite.
The volume of goods sold in stores and online dropped 0.9 percent, more than the 0.6 percent decline seen in a Bloomberg survey of economists, figures from the Office for National Statistics showed Thursday. Sales excluding auto fuel also fell a larger-than-expected 0.9 percent.
The statistics office carried out its monthly survey between May 29 and July 2, meaning some responses were received in the week following the June 23 Brexit referendum. A gauge of consumer confidence fell at the fastest pace in 21 years after the vote.
Food sales fell 1.2 percent, while non-food sales dropped 0.8 percent. Sales at department stores dropped 1.6 percent and clothing and footwear retailers saw sales decline 1.8 percent.
In a separate report Thursday, the ONS said the budget shortfall narrowed more than forecast to 7.8 billion pounds in June from 10 billion pounds a year earlier, thanks to a jump in income tax receipts.
It left the deficit in the fiscal first quarter at 25.6 billion pounds, down from 27.9 billion pounds a year earlier. Prime Minister Theresa May has said the government has not abandoned its target of returning the public finances to surplus, but is no longer seeking to do so by the end of the decade.
Those favoring the UK’s withdrawal often assumed that the EU would eventually allow Britain access to the common market without also requiring unfettered free movement of labour. The UK, they have pointed out, is the world’s fifth-biggest economy and the ninth-biggest export economy – who would want to worsen the terms of trade with a partner this big?
It would only be that simple, however, if Britain agreed to an off-the-shelf option – Norway-style membership in the European Economic Area, which imposes many EU rules and financial obligations but gives adherents an “emergency brake” on the EU’s “four freedoms” – the free movement of people, goods, services and capital. Such a deal would be relatively easy to negotiate because it wouldn’t require much change from the status quo, but Brexiters might not accept it.