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Brexit gloom for UK retailers

Bexit is already impacting the high street. According to the figures released by accountancy firm BDO reveal a 3.6 per cent decline in year-on-year sales in June - the worst in more than a decade.

The fashion sector experienced its second lowest monthly figure so far this year, as sales fell 4.9 per cent compared to June 2015. Homewares were hit, too, dropping 6 per cent year-on-year, while lifestyle goods inched down by 0.2 per cent.

BDO data showed that overall sales grew 3.8 per cent year-on-year in the first week of June. But the aftermath of Brexit bruised retailers as the month wore on, plunging 3.1 per cent in the second week as consumers started to worry. By the final week of June - two days after the referendum - sales were down 8.1 per cent year-on-year.

Incidentally, June marked the fifth month in a row that the British high street reported negative growth. But it was the first time in almost a year that lifestyle, fashion and homewares all recorded declines in the same month. According to the latest BRC-Nielsen Shop Price Index, June was also the 38th month of deflation in the U.K.

According to Sophie Michael, head of retail and wholesale at BDO, many retailers may have hedged against the falling pound for the short term, but if sterling stays at these levels, the cost of importing goods and further erosion to margin may need to be passed onto the consumer.