LONDON (Reuters) - British retailers are downbeat about the outlook for August as the cost-of-living squeeze weighs on demand, despite a relatively modest dip in spending this month, figures from the Confederation of British Industry showed on Tuesday.
The CBI's July retail sales balance for July edged up to -4 from June's -5, but expectations for August dropped to -14, the weakest reading since March 2021 when many shops still faced COVID-19 lockdown restrictions.
"Retail activity continues to take a hit as consumers struggle to cope with the effects of the cost-of-living crisis," CBI economist Martin Sartorius said.
Consumer price inflation hit a 40-year high of 9.4% in June - forcing many shoppers to spend more on essentials such as fuel - while official figures for June showed that retail sales volumes excluding fuel were 5.9% lower than the year before.
In a sign that supply chain difficulties are easing - and that retailers fear having too much stock on their hands as demand weakens - the CBI's balance for retail stock levels relative to expected demand was its highest since July 2020.
The survey was based on responses from 53 retailers between June 27 and July 13.
(Reporting by David Milliken; Editing by William Schomberg)