Market News

Story by Isabel Infantes

LONDON (Reuters) -A downturn in British retail sales entered its 11th consecutive month in August and shops raised their prices by the most since late 2023, a Confederation of British Industry survey showed on Wednesday.

The CBI's monthly gauge of how retail sales compared with a year earlier was little changed at -32 from July's -34 but better than a dip to -46 in June. The outlook for September improved to -16.

"Weak demand and higher labour costs continue to put pressure on margins, dampening sentiment across the retail and wider distribution sector," Martin Sartorius, principal economist at the CBI said.

"This downbeat outlook is reflected in firms' plans to scale back investment and hiring," he said.

Many employers have said they are feeling the strain from a decision by finance minister Rachel Reeves to make them pay more higher employment taxes from April at the same time as a sharp increase in Britain's minimum wage.

The CBI's measure of average selling prices in the 12 months to August rose to +65, the fastest rate since November 2023, from -35 in May but the expected increase for September was a slower +43.

The data was collected between July 28 and August 14 and was based on responses from 56 retailers and 98 wholesalers.

(Writing by William Schomberg; editing by David Milliken)