LONDON (Reuters) - British retailers reported a year-on-year fall in sales in June and expect sales next month to be well below normal for the time of year as the surging cost of living erodes shoppers' disposable income, a survey showed on Thursday.
The Confederation of British Industry said the balance of retailers reporting sales below normal, rather than above normal, fell to -19 in June from zero in May, and was expected to decline further to -25 in July.
The CBI's headline sales balance for June, which compares sales volumes with a year earlier, dropped to -5 from -1 in May.
"Retail volumes are struggling as high inflation eats away at consumers' budgets. The squeeze on household incomes appears to have offset any boost to activity from the extended Platinum Jubilee bank holiday earlier this month," CBI economist Ben Jones said.
Lower demand from shoppers is also causing retailers to cut orders with suppliers.
"Wholesalers (are) seeing a 14-month period of robust sales growth come to a grinding halt this month," Jones said.
Official figures on Wednesday showed consumer price inflation rose to 9.1% in May, its highest in more than 40 years, and the Bank of England forecasts it will exceed 11% in October when household energy tariffs are due to rise by 40%.
The CBI survey took place from May 27 to June 14, and was based on replies from 100 companies, including 39 retail chains.
(Reporting by David Milliken; Editing by William Schomberg)