Holidaymakers warned of Dover ferry queues; inflation hits UK retail sales in June – business live
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Holidaymakers and lorry drivers have been stuck in long queues overnight at Dover, the UK’s key ferry crossing to the EU. And the Port of Dover has come out swinging, blaming French border authorities for failing to staff the posts.
The Port said “the popularity of Dover is not a surprise” as school holidays begin, but resources from Police Aux Frontieres (PAF) have been “insufficient”.
In a statement the Port said:
We are deeply frustrated that the resource at the French border overnight and early this morning has been woefully inadequate to meet our predicted demand and even more deeply regret the consequences that will now be felt by so many.
And there is no respite for British consumers. UK retail sales dropped for the third month in a row in June according to the latest government figures on Friday. Analysts suggest it is a sign of the slowing economy.
Sales dipped in June by 0.1%, the Office for National Statistics (ONS) said, but it also revised down its estimate for May, turning a decline of 0.5% to one of 0.8%.
The decline came even though food sales volumes rose by 3.1% because of feasting during the celebrations and an extra bank holiday for Queen Elizabeth’s jubilee celebrations.
Retail sales are seen as a bellwether for the UK’s consumer-dependent economy. The augurs are not good: 40-year high inflation is eating into spending power, with energy prices in particular on the up – not helped by Russia’s invasion of Ukraine. The ONS said there was a “broad downward trend since summer 2021 following the lifting of hospitality restrictions”.
The British Retail Consortium, a lobby group, said there are “hard days ahead” for UK consumers. Helen Dickinson, its chief executive, said:
The cost of living crunch caused by record inflation continues to damage consumer confidence and stifle household spending. Discretionary spending and particularly bigger purchases were put off as consumers become increasingly concerned about the future. As a result, furniture sales and white goods were particularly hard hit, while food sales held up a little better.
Retailers are squeezed between higher costs and weaker demand, resulting in the most challenging trading period since the start of the pandemic.
The above chart is also a handy illustration of the pressures hitting UK consumers. While the value of the goods bought has continued to rise, the volume that buyers are getting for their money is dropping.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, a consultancy, said:
Households are continuing to spend more on goods, but are getting less in return.
Tombs said retail sales will probably bounce somewhat in the third quarter of the year thanks to the rise in the threshold for national insurance contributions and cost of living payments
Households’ real disposable incomes likely will edge up in the third quarter, facilitating a modest recovery in retail sales. Nonetheless, disposable incomes likely will fall to a new post-Covid low in the fourth quarter, as government policy support announced to date will not offset the huge hit to real disposable incomes from October’s likely 65% rise in the energy price cap.