UK retail sales fall sharply as recession risk heightens

The pound slid further towards $1.14 on the back of the retail sales data. Picture: Chris J. Ratcliffe/Bloomberg.

British retail sales fell much more than expected in August, in another sign that the economy is sliding into recession as the cost of living crunch squeezes households' disposable spending.

Retail sales volumes dropped by 1.6% in monthly terms in August, the Office for National Statistics said - the biggest fall since December 2021 and worse than all forecasts in a Reuters poll of economists that had pointed to a 0.5% fall.