Retail stock levels reach record high stoked by Brexit fears

The increased stock levels in October followed an earlier peak in August. The business organisation said the approach of Christmas, as well as Brexit jitters, had driven higher stock holdings.

The UK had faced the possibility of a no-deal Brexit at the end of this month, but that will not happen after an extension of the departure date to January 31 was agreed. A general election is now on the cards.

Increased retail stock holdings came as retail sales, volumes and orders declined for the sixth month in a row, according to the CBI Distributive Trends Survey. The decline was the slowest over that period, however.

CBI chief economist Rain Newton-Smith, said: “The sector is struggling with ongoing digital disruption, layered on top of cost pressures from a weak pound and the cumulative burden of an outdated business rates regime.

“Retailers have also had to contend with the looming Brexit deadline, which has partly driven a record spike in stocks. The timing could not be worse: the run-up to Christmas is a crucial time of year for the retail sector.”