British retail sales endured their sharpest monthly fall in six months in June, but stores suggested bad weather rather than Brexit was to blame, leaving open the question of how big a hit the vote to leave the European Union will deal to the economy.

Retail sales volumes in the five weeks to July 2 fell by 0.9 percent, their largest fall this year, and clothing stores reported the sharpest annual drop in quarterly sales in 25 years, according to official figures released on Thursday.

Sterling dropped against the dollar after the data, which came in below economists’ expectations, as analysts said a Brexit effect could not be ruled out and that worse may be to come.

But the Office for National Statistics stated retailers did not attribute the fall to the result of the June 23 referendum.

“Changeable weather” was the main thing dragging down clothes sales, while department stores got a lift from the Euro 2016 football contest and the Queen’s 90th birthday celebrations, it said.

Measures of consumer sentiment have shown a darker mood since the EU vote, but this has not translated into an immediate fall in households’ spending in data from the ONS, British Retail Consortium and the Bank of England.

“The volume of retail sales will only really start to be hit more markedly further down the line once firms cut back on hiring … and the fall in sterling is passed through into retail prices,” UniCredit economist Daniel Vernazza reported.

A Mintel market research report showed that while 39 percent of British consumers thought leaving the EU would hurt the economy, 25 percent expected to see gains.

incomplete evidence on the impact of the Brexit vote may put the Bank in a dilemma next month when it decides whether to cut interest rates, and what if any additional stimulus the economy needs to deal with what it expects will be a material economic slowdown.

While sterling endured it’s biggest two-day fall on record and some corners of the financial markets – such as commercial property funds – have come under severe pressure, policymakers say the situation does not remind them of the 2008 financial crisis.

BoE policymaker Kristin Forbes said in a newspaper column on Thursday, before the data, that it would be better to wait and see the blow of the Brexit vote on Britain’s economy before cutting rates, a view shared by her colleague Martin Weale.

They stand at odds with the central bank’s chief economist, Andy Haldane, who said it was better to use “a sledgehammer to crack a nut”, even if the effect of leaving the EU on investment and hiring turned out to be small.

Last week the Bank surprised markets by not cutting rates, but minutes of that decision showed most policymakers expected to approve a package of stimulus measures in August.

Next week will see the release of economic growth figures for the three months to June, which the central bank expects to show growth roughly in line with Britain’s long-run average.

Retail sales over that period expanded at their fastest quarterly pace since late 2014.

In June, public borrowing dropped to its lowest for the month since 2007, down 22 percent on the year to 7.8 billion pounds, the ONS said on Thursday.

But this will be a slight comfort to former finance minister George Osborne, who lost his job after the EU vote, and the government’s budget watchdog said there were some hints of weakening tax revenue in the run-up to the vote.

New finance minister Philip Hammond told parliament on Tuesday that the expected slowdown in the economy meant Britain needed a new framework to tackle its budget deficit, which he said was still “very large”.

The deficit was 4.0 percent of gross domestic product in the 12 months to March, down from over 10 percent in 2010 but still among the highest for a developed nation.

Source: Reuters