Retail sales growth at 17-month high

Click to follow
The Independent Online

Retail sales volumes are growing at their fastest annual rate since May last year, official figures showed today.

October's sales were 0.4 per cent ahead of an upwardly-revised September figure and 3.4 per cent ahead of the same month last year - the biggest year-on-year rise since May 2008 at the beginning of the recession.

The rise was driven by buoyant clothing and footwear sales, the Office for National Statistics (ONS) said.

The figures showed sales volumes for clothing and footwear stores 10.7 per cent higher than a year ago, buoyed by half-term shopping and Halloween celebrations.

Annual growth in non-food retailing reached 3.5 per cent compared with 1.6 per cent across food stores, the ONS said.

The biggest year-on-year increase came from non-store retailing and repair. This category, which includes online giants such as Amazon, saw sales volumes up 15.8 per cent on October last year.

The ONS said there was anecdotal evidence of shoppers bringing forward online purchases due to fears of disruption from the postal strike.

Last month's retail sales data showed that, by value, sales also rose by 0.4 per cent between September and October and by 3 per cent year-on-year to £22.4 billion.

The average weekly value of sales was £5.6 billion.

There was more evidence of falling inflation and cost cutting on the high street, with the ONS estimating that prices fell 0.4 per cent year-on-year in October.

While October's month-on-month rise in volumes was slightly below the 0.5 per cent expected in the market, economists said the figures were encouraging.

Jonathan Loynes, chief European economist at Capital Economics, said: "October's UK retail sales figures confirm that high street spending is still holding up reasonably strongly in the face of some pretty adverse conditions for consumers."

But he added that spending elsewhere was still under pressure amid the recession and rising numbers of jobless.

He said: "Spending off the high street - on services, etc - has been much weaker during the economic downturn, with the result that overall household spending probably fell again in the third quarter.

"With household debt still very high, unemployment set to rise a lot further and a fiscal squeeze looming, the outlook for consumers is hardly rosy."

But economist David Page at Investec Securities said the sales rise in October and the September revision suggested the retail result may provide further scope for an upward revision to third quarter gross domestic product estimates.

The second GDP estimate is due to be published next week.