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Retail

UK Retail Sales Slide Again In October In New Blow For Economy

By Reuters
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British retail sales volumes fell unexpectedly in October as stretched consumers stayed at home, official data showed, in a new warning sign for the economy.

Retail sales volumes dropped 0.3% month-on-month, following a revised 1.1% decline in September that was worse than first estimated, the Office for National Statistics said.

Economists polled by Reuters had forecast that sales volumes would rise by 0.3% on the month in October.

'Darkening Outlook'

Overall the figures fitted with the darkening outlook for Britain's economy, with economic growth stagnant and strong price pressures now fading, albeit slowly.

Investors think will these factors will force the Bank of England to lower interest rates next year.

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"Retailers suggested that cost of living, reduced footfall and the wet weather in the second half of the month contributed to the fall," the ONS said.

The figures also showed a small downward revision in retail sales for the third quarter.

Given the fine margin by which Britain avoided an economic contraction during the third quarter in an early estimate published last week, Friday's figures showed a risk that GDP too could yet be revised lower to show a negative reading.

Christmas Period

Still, retailers will be hoping the crucial Christmas trading period will yield better times.

Despite the recent macro data and a raft of consumer surveys being downbeat, major retailers, including Tesco, Sainsbury's, Next, Primark and Marks &Spencer, have made confident comments about their prospects in the run-up to Christmas.

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