UK retail sales jump to highest level in over three years despite consumer income squeeze

Accountancy firm BDO’s High Street Sales Tracker showed overall like-for-like sales were boosted by an annual 2.9 per cent

The rise in sales was distorted by weak figures for September last year (Getty)

British shops made their biggest jump in sales in more than three years in September, a survey of the retail sector shows, suggesting consumers are finding ways to cope with the squeeze on their incomes.

Accountancy firm BDO said on Friday that its High Street Sales Tracker found overall like-for-like store sales rose by an annual 2.9 per cent, adding to a smaller rise in August.

However, the increase was distorted by weak sales in September 2016, suggesting underlying growth remained slow.

Britain’s economy slowed sharply in the first half of 2017 as the rise in inflation since last year’s Brexit vote and modest pay growth squeezed spending power for households.

The Bank of England expects consumer demand to pick up. Three weeks ago, it said that most of its policymakers believed the first interest rate hike in a decade was likely to be needed in the coming months, if inflation pressures continued to build.

“Two consecutive months of positive growth will be a welcome relief for retailers following challenges seen in autumn in prior years,” Sophie Michael, head of retail and wholesale at BDO, said.

Last week, the Confederation of British Industry (CBI) said retail sales growth hit a two-year high in early September.

The CBI survey showed that its retail sales balance jumped to +42 from -10 in August, beating the expectations of City of London analysts.

These results followed strong August sales figures from the Office for National Statistics, showing a 1 per cent growth.

Reuters