British retailers’ profitability is likely to be held back by Brexit, according to research by credit ratings agency Moody’s.

While Moody’s expects median EBITDA growth of 3% for UK retailers in 2019, that is behind the 4.2% forecast for their Continental European counterparts.

Moody’s said Brexit would depress the UK figure, which “could be lower if there is a disorderly exit from the EU”.

The comparatively subdued UK performance is an expectation “of still slow GDP growth, continued intense competition and weak consumer confidence”.

Moody’s said: “A disorderly exit from the EU would be negative for UK retailers on a number of levels, including currency devaluation, delays at ports and the resultant hit to economic growth and consumer confidence.”

However it added that “for now, our base case assumes slightly improving economic conditions compared to 2018”.

In general, Moody’s anticipates UK trading conditions “to remain very difficult” and midmarket retailers will be worst hit.

Marks & Spencer and Next are expected to deliver “broadly flat profit” and there will be “only moderate growth” for Matalan.

Moody’s said: “Earnings of department store operators Debenhams and John Lewis & Partners will remain depressed.”

Most food retailers are anticipated to “record solid profit growth” in the next 12 to 18 months.

Across Europe, “discounters and online specialists will continue to curb traditional retailers’ earnings growth”.

B&M and Ocado are among the retailers expected to generate EBITDA growth over the next 18 months of more than 10%.