Economy

Retail sales in August 'blow forecasts out of the water'

Retail sales in August 'blow forecasts out of the water'”

Even more surprising, the key driver of August's surprisingly robust growth was from non-food stores like department stores and other DIY outlets.

On a month-to-month basis, growth was 1%, compared to an expected 0.2%, the data showed.

Sales rose 1 per cent month-on-month, exceeding expectations for a much smaller increase of 0.2 per cent.

The currency markets reacted well to the figures with the pound gaining nearly a cent against the dollar after their release. Wednesday's official data showed a sharp pick-up in monthly sales growth in August to its fastest since April, despite inflation pressures that have previously squeezed spending. However, retail sales figures are notoriously volatile and with a number of factors making reliable seasonal adjustment nigh on impossible, the health of consumer spending should be assessed with caution. Economists had forecast a 1.2 percent increase.

This was despite a rise in store prices which have recorded their highest year-on-year price growth since March 1992.

Senior economist at Hargreaves Lansdown Ben Brettell added: "The UK consumer continues to show remarkable resilience, with retail sales in August blowing economists" forecasts out of the water.

"However, we are still seeing underlying growth in sales volumes, and with strong growth in non-essential purchases", ONS statistician Kate Davies said.

'Encouraging as this is, sterling continues to be a double-edged sword for United Kingdom retailers; on one side, its weakness is prompting more Britons to holiday at home as well as attracting more tourists from overseas, but on the other, retailers are facing rising costs and inflationary pressures and increasingly they will have to pass some of this on to consumers through price rises'. The narrower measure of inflation used in retail sales data rose to an annual rate of 3.2 percent in August, up from 2.7 percent.

United Kingdom retail sale figures rose unexpectedly for August, after official data revealed consumer spending had grown in spite of inflation.

United Kingdom retail figures for August better-than-expected. The Confederation of British Industry reported the weakest performance since July 2016, while the British Retail Consortium said top-line growth was the fastest so far this year.



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