There was a bigger than expected fall in UK retail sales in September, official figures showed on Thursday.
The Office for National Statistics reported that sales volumes declined by 0.8 per cent in the month, worse than the 0.4 per cent anticipated by City of London analysts.
This followed strong activity from shoppers in the July and August heatwave, when Britons splashed out on food and drink.
In September food sales were down sharply. There was a decline in non-store retailing activity and no growth from non-food stores.
Over the three months to September sales volumes were still up 1.2 per cent, although this was down from the 1.9 per cent rate in the three months to July.
Retail sales account for around 30 per cent of total consumer spending and are seen as a bellwether of the direction of the overall economy.
“Some easing back in retail sales was always to be expected in September given the overall strength in August and July,” said Howard Archer of the EY Item Club.
He added that third-quarter growth “buoys belief that consumer spending made an appreciable contribution as GDP growth likely improved to at least 0.6 per cent quarter-on-quarter in the third quarter.”
The ONS estimates that GDP growth was 0.4 per cent in the second quarter of 2018.
But other analysts were less optimistic.
“It looks like consumer spending – along with the weather – peaked in early summer and has been declining ever since,” said Ben Brettell of Hargreaves Lansdown.
“Where we go from here is highly uncertain. Brexit is hitting consumer confidence hard, but on the plus side wage growth has hit a decade high while inflation is falling. So consumers look likely to have more spending power – the issue is whether they choose to use it, or keep their powder dry until more clarity over Brexit emerges.”
