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UK hung parliament ‘spells trouble for retail’

Analysts have warned that the retail sector could suffer as consumers pull back on spending in the aftermath of a hung parliament.

With inflation already on the increase post-Brexit, consumers are continuing to feel the pinch, while a falling Sterling and shares in Sainsbury’s and Marks & Spencer dropping are further causes for concern.

Britain faces a hung Parliament for just the sixth time in its political history, the most recent being in 2010.

However, luxury fashion retailers such as Burberry and Ted Baker saw a rise of two per cent as investors made the most of favourable exchange rates and invested in the international businesses.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “Housebuilders are down across the board, but they’re joined by restaurants, high street banks, fashion retailers and media outlets.

“The implication is clear, consumers’ disposable incomes are expected to be stretched, and big ticket items, like property upgrades, as well as little luxuries, like regular meals out, are expected to be among the first to go.”

“Sinking share prices at the likes of Next, Restaurant Group, easyJet and Dixons Carphone are all a reflection of the fact that lower Sterling and political uncertainty mean the pounds in Britons’ pockets seem set to be lighter going forwards.

“There’s good news for UK investors who are invested in more international businesses though. The combination of international earnings and a wealthier customer base is supporting retailers such as Burberry and Ted Baker.”