UK Retail Sales Decline to the Lowest Levels in 40 Years Due to Iran War Fears

UK retail sales plummet to a 40-year low as the Confederation of British Industry reports a sharp decline in consumer spending driven by global conflict and inflation.

According to a survey conducted based on response from 61 retail chains between March 26 and April 14 by the Confederation of British Industry (CBI), the Iran war played a major role in stroking households’ inflation fears which has caused UK retail sales to record the highest year-on-year decline in sales in more than 40 years. With the CBI’s monthly retail sales volume measure dropping to an all-time low since the series started in 1983, 77% of firms reported reduced sales compared to 2025. Only 9% of firms reported an increase, reflecting the bleak economic situation at present. In light of these challenges, the CBI urged the government to prevent new employee rights legislation from further increasing employers’ costs along with reducing their property taxes and lower electricity bills.  

Furthermore, this steep decline in CBI figure compared to other data can be attributed to US and Israel launching attacks on Iran on February 28 which caused the Strait of Hormuz, a major route of oil exports, to be closed. Also, Britain’s longest-running consumer confidence survey, from GfK, decreased to its lowest this month since October 2023.

At the same time, a CBI survey of manufacturers indicated that they viewed the present period with the lowest optimism since the start of the COVID pandemic. Interestingly, the retail survey whose results were released on Monday, April 27, elicited a lesser sense of decline among retailers who were asked a related question regarding sales being good, bad, or normal for this time of the year. CIO Bulletin views the report as establishing the economic costs of the Iran war whose consequences reverberated all across the world to the detriment of billions and causing a downturn to national economies.