The median consensus is calling for UK retail sales to fall a further 0.2% month-over-month, adding to the 3.9% drop seen in June. In annualized terms, the retail sales' growth rate is likely to slow to 1.8% in July, down from June's 2.2% figure.

HSBC Securities economist Janet Henry is anticipating a further decline in UK retail sales by 0.4% month-over-month, deepening the decline seen in July. In annualized terms, Henry is expecting retail sales growth to slow to 1.8%, down from June's reading.

"The surveys that we look at are an indication of what might come out," Henry said, referring to the Confederation of British Industry (CBI)'s survey on distributive trades, as well as the British Retail Consortium (BRC) survey.

In late July, the CBI had reported a net balance of -31% of respondents who reported falling sales levels in the month.

According to the CBI's industrial trades survey, the -36% balance between the percentage of respondents who reported lower sales in July and the percentage of respondents claiming a higher level of sales is the weakest recorded in the history of the study.

"Sixty one per cent of respondents to its latest Distributive Trades Survey reported that sales in the first half of July were lower than a year ago, while 25% said sales had increased," a CBI press release elaborated.

In addition, according to the BRC, same-store retail sales had contracted 0.9% from June to July, marking the second month in a row where same-store sales had decreased.

"(The surveys) are all pointing to a decline," Henry said. "The question is just how much of a decline."

Westpac economist James Shugg also made reference to the CBI and BRC reports and is expecting retail sales to fall 0.2% month-over-month, in line with consensus. On a yearly basis, Shugg is forecasting the sales growth rate to slow to 1.4%, down from both the median consensus the previous month's figure.

"(CBI and BRC) really don't point to any significant rebound in sales in July following the very steep decline that we saw in June," Shugg said.

However, Shugg did acknowledge that retail sales figures were quite volatile and the sharp decline in June was partly due to the unexpectedly strong numbers in May.

"In other words, there's been a lot of volatility in the last two months," Shugg said. "But now that we are through that volatility, the underlying trend that is showing through is very soft."

By Todd Wailoo, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Megan Ainscow, This email address is being protected from spam bots, you need Javascript enabled to view it

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