High street sales surge to highest level in two years

HIGH STREET sales surged unexpectedly last month to hit their highest level for almost two years as consumers took advantage of massive price cutting.

Official figures showed retail sales rose 4.7 per cent compared with 3.8 per cent in September. This was the steepest rise since January 1998 and much higher than the 4.1 per cent expected by economists.

However, the value of sales rose much more slowly, indicating that retailers were unable to pass on any price rises to consumers. The Office for National Statistics said prices fell 0.9 per cent in October, 0.7 per cent in September and 0.6 per cent in August. The largest rise was in household goods, which includes items linked to the housing market such as electrical equipment and furniture. In the three months to October this rose 9.4 per cent, the highest since May 1998.

The ONS said that while the biggest rise was in electrical goods, which were up 13 per cent, the increase measured by value rose just 4 per cent. These figures will be seized on by the retail industry, which claims that the increasing sales volume masks the fact that prices are falling.

The ONS said: "The latest data confirm the underlying rate of growth has picked up in recent months, particularly in relation to last year when things were subdued. October was much the same as previous months but in relation to last year it is possibly a bit stronger."

The minutes of the last meeting of the Monetary Policy Committee showed that DeAnne Julius, the lone "dove", believed intense competition in the economy would restrain inflation.

Analysts said yesterday's data appeared to support that. "Strong retail competition has seen a large squeeze in margins," said Richard Iley of ABN Amro. "The implication of this is a benign outlook for interest rates. Despite buoyant consumption and nascent cost pressures at the factory gate, there is little prospect of inflation taking off."

The ONS said the figures revealed an early impact of spending ahead of the millennium - but perhaps not what people expect. It said one major retailer had reported a surge in wine sales in preparation for the millennium.

The buoyant sales of household goods were supported by separate figures yesterday that showed mortgage lending enjoyed another strong rise in October. Lending for house purchase rose pounds 300m to pounds 8.3bn in October, the Council of Mortgage Lenders said.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power