Shoppers gave George Osborne a pre-Christmas boost after they took advantage of falling prices in October to boost high street sales, according to official figures.
The Office for National Statistics said the quantity of goods sold increased 4.3% on the year before and 0.8% compared with September as falling petrol prices provided extra cash for shopping on clothes and furniture.
The bounceback from a fall in the previous month will give the Treasury a boost at a time when other parts of the economy are slowing down. Manufacturing businesses and the broader services industry have both shown signs of moderate growth in recent surveys compared with a more buoyant period earlier in the year.
However, seasonally adjusted figures revealed that the total spent in each of the industry’s categories fell and discounting by retailers was widespread.
All sectors of retailing, including the hard hit supermarket sector, enjoyed rising volume sales in October with online being the only exception. The ONS said web-based sellers saw a 0.1% percentage point fall in the proportion of online sales to 11.2%.
Clothing stores showed growth of 0.5% as the onset of winter weather encouraged the sale of jumpers and coats, but the rise failed to make up for a 5.9% fall in September.
Anecdotal reports from last weekend appear to show the trend for rising sales will continue into November and the pre-Christmas rush. In recent years shoppers have delayed buying presents until the last few days before Christmas in the hope of finding bargains. But shoppers have reported long queues and full car parks in several major retailing centres across the country. Colder weather in November is also expected to trigger a larger increase in winter clothing sales.
Jeremy Cook, chief economist at foreign exchange broker, World First, said the fall in the value of sales was likely to persist.
“Unfortunately moving forward, while there is a case to be made for a good Christmas for consumers - with sales discounts likely to open earlier and be deeper than years before - the outlook for the high street as a whole is not a good one,” he said.
“Until real wages start improving - something that we see happening late in Q1 of next year - the recovery of both consumers and retailers cannot be guaranteed,”
Howard Archer, chief UK economist at IHS Global INsight, said the underlying pattern in UK retail sales regained some strength in October, though it remained softer than it was earlier in the year.
“Specifically, the three-month on three-month growth rate in retail sales volumes improved to 0.4% in October from 0.2% in September,” he said.
“The improvement in retail sales was widespread in October. Sales of household goods were particularly strong, especially furniture, which have obviously been helped by the overall pick-up in housing market activity,” he added.
Dennis de Jong, managing director at UFX.com, said:
“There are reasons for George Osborne to be cautiously optimistic about the health of the UK economy. Today’s strong retail figures are just the news retailers want with the festive season approaching.
“Year-on-year wage growth was ahead of expectations in September and, for the first time in five years, higher than inflation. Whisper it quietly, but Christmas might just be coming early for the government.”
