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Retail sales figures signal an economic slowdown is already underway

Southampton port
Ports such as Southampton need to send more UK goods to foreign markets

Consumers are reining in their spending after a post-referendum shopping spree. That is the message from yesterday’s retail figures which showed a fall of 1.4pc in sales volumes between the final quarter of last year and the first three months of 2017.

Such a big fall in retail sales volumes is very unusual. Since the mid-1990s, we have only seen one quarterly spending drop bigger than this – when the temporary cut in VAT came to an end in early 2010. Even in the depths of the financial crisis, retail sales did not fall as sharply in a single quarter.

The strong surge in consumer spending which started in 2014 – and continued through 2015 and 2016 – has come to an abrupt end. This is not just because consumers are taking a breather after several years of rising spending. There are more significant forces putting a brake on our willingness to spend in shops and online.

The first is the rise...

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