UK retail sales fall 0.9% after Brexit referendum

London - UK retail sales had their biggest drop in six months in June, adding to signs that the vote to leave the European Union is starting to bite.

The volume of goods sold in stores and online dropped 0.9%, more than the 0.6% decline seen in a Bloomberg survey of economists, figures from the Office for National Statistics showed on Thursday. Sales excluding auto fuel also fell a larger-than-expected 0.9%.

The statistics office carried out its monthly survey between May 29 and July 2, meaning some responses were received in the week following the June 23 Brexit referendum. A gauge of consumer confidence fell at the fastest pace in 21 years after the vote.

Food sales fell 1.2%, while non-food sales dropped 0.8%. Sales at department stores dropped 1.6% and clothing and footwear retailers saw sales decline 1.8%.

In a separate report Thursday, the ONS said the budget shortfall narrowed more than forecast to £7.8bn in June from £10bn a year earlier, thanks to a jump in income tax receipts.

It left the deficit in the fiscal first quarter at £25.6bn, down from £27.9bn a year earlier. Prime Minister Theresa May has said the government has not abandoned its target of returning the public finances to surplus, but is no longer seeking to do so by the end of the decade.