UK Retail Sales Fall Most In 6 Months

UK Retail Sales Fall Most In 6 Months

Retail sales fell by 0.8 percent in September, reversing a jump in August and slowing third-quarter retail growth to a year-on-year rate of 1.5 percent.

Ian Geddes, head of retail at Deloitte, said: "Against a well-documented backdrop of rising inflation, increasing levels of debt and fragile consumer confidence, the retail industry will have been looking forward to entering the final three months of the year - typically a crucial trading period that encompasses both Black Friday and the Christmas shopping periods".

United Kingdom retail sales dropped sharply in September, according to the latest figures from the Office for National Statistics, causing the pound to sink against other currencies.

Ian Gilmartin, head of retail and wholesale at Barclays Corporate Banking, said: "It's important to avoid overstating the negatives in September's retail sales, as retailers did manage to post year-on-year growth despite the range of headwinds they are battling now".

Figures earlier this week showed that inflation hit a five-year high of 3 per cent in September, piling more pressure on the Bank of England to raise interest rates next month.

The value of pound fell immediately after the figures were released, with sterling down nearly half a cent to $1.3126, suggesting traders believe a rate rise next month is less likely.

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That means that retail sales will have had a positive impact overall on third quarter economic growth figures, which are due for release next week.

The figures come at the Bank of England contemplates its first interest rate rise in a decade.

"As demand softens in much of the industry, retailers will have to make hard decisions about the extent to which they are able to discount in the run up to Christmas to encourage consumers to part with their cash".

"Despite the drop in retail sales, it would be unwise to peg a consumer slowdown on one month's figures alone, which can be affected by random events like the weather, or a big sporting event on the telly". The expected growth rate was 2.2 percent.

Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.2% including bonuses, and by 2.1% excluding bonuses, compared with a year earlier. Once inflation is taken into...

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