Just like July, the CBI's August distributive trades survey was much weaker than expected. At minus 45 percent, the headline sales balance was some 30 percentage points short of the market consensus and down a sizeable 20 percentage points versus the previous month. This was its fourth successive sub-zero print and its weakest reading since March 2021, in the midst of Covid. With actual sales falling 1.5 percent on the month a year ago, today's data should imply a particularly poor period for retailers. The CBI's forecast for September is minus 21 percent.

The disappointing mid-quarter results further trim the UK's ECDI to minus 31 and minus 53 respectively. Versus expectations, recent economic news has been significantly weaker than expected and make the September BoE MPC vote all the more complicated.

The headline orders balance is expected to improve from minus 25 percent in July to minus 15 percent this month.

The Confederation of British Industry (CBI) produces a monthly survey (and a more detailed quarterly report) analysing the performance of the UK retail, wholesale and motor trade sector. Volume sales, orders on suppliers, sales for the time of year and stocks are all covered and the quarterly survey also covers imports, selling prices, numbers employed, investment and business situation. Financial markets tend to concentrate on the CBI's annual sales growth measure as a leading indicator of the official retail sales report.

This survey is a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. The monthly update provides a vital update on volume of sales, orders and stocks. Like the industrial survey, it carries significant weight in the formulation of economic policy at the Bank of England and within government as a highly respected barometer of high street trade. It is considered to be an advance indicator of retail sales although it is not well correlated with the official data on a monthly basis.