UK retail sales rebound in October

UK retail sales rose more-than-expected in October, rebounding after an extra bank holiday in September kept shops closed, but were below pre-pandemic levels, reflecting the impact of rising prices.

The volume of retail sales in the UK rose 0.6 percent mom last month, according to data released on Friday by the Office for National Statistics.

The number was double the 0.3 percent forecast by economists polled by Reuters and followed a revised 1.5 percent decline in the previous month when sales were hit by the extra holiday for the Queen’s funeral.

However, sales volumes fell 2.4 percent in the three months to October compared to the previous three months, reflecting the impact of rising prices and continuing the downward trend since summer 2021.

Darren Morgan, director of economic statistics at ONS, said: “Retail sales rose in October, although this is likely a rebound effect after last month’s weak sales as many retailers closed or otherwise operated on the additional Queen’s Funeral Holiday became.”

He added: “Looking at the bigger picture, retail sales are continuing their downward trend observed since the summer of 2021 and are below pre-pandemic levels.”

In October, the volume of goods sold was 0.6 percent below the pre-pandemic February 2020 level, despite shoppers spending 14.2 percent more, revealing the blow inflation has dealt to household purchasing power.

UK Retail Sales line chart, February 2020 = 100, showing UK consumers are buying less and spending more

Separate data released on Friday by research firm GfK showed that UK consumer confidence rose marginally to minus 44 in November, after hitting a 48-year low of minus 49 in November.

But the surge was “probably no more than a collective sigh of relief as a new prime minister takes charge after the alarming fiscal antics we saw in September,” said Joe Staton, client strategy director at GfK.

He added that “household budgets remain shrouded in massive uncertainty amid fresh food price jumps, still-uncomfortably expensive energy, the prospect of fresh rate hikes putting pressure on mortgage and rent payments, potential future council tax hikes and depressed real wages.” .

The figures come a day after the Office for Budget Responsibility forecast that 2022-23 would see Britain’s standard of living fall by the most since records began in the 1950s. The UK’s fiscal watchdog, which released its forecast alongside the autumn statement, calculated that UK household disposable income over the next two years will wipe out growth over the previous eight years.

https://www.ft.com/content/167b7305-8a6f-49e4-9019-9b5a4fccfd8d UK retail sales rebound in October

Adam Bradshaw

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