UK Retail Sales Soars In October

The Office for National Statistics (ONS) said sales volumes in October were up 7.4% from a year earlier, while on a monthly basis, sales jumped 1.9% from September - a much stronger increase than economists had forecast.

The retail industry continued to show strength on a quarterly basis as well, with the quantity bought in the three-month period increasing by 1.9% compared with the previous quarter to mark the 34th consecutive period of quarterly growth.

Clothing and footwear sales, which account for 12.5 per cent of total sales, jumped 5.1 per cent, the most since March 2014.

Sales of household goods gained 0.8 per cent and food sales climbed 0.8 per cent. The total sales surged 7.4 per cent in October from a year earlier, the biggest increase since April 2002.

A surprise leap in retail sales volumes last month has boosted hopes the U.K economy will end the year on a high note, as consumers continue to shrug off the shock of the Brexit vote.

“Cooler temperatures in October boosted clothing sales as shoppers took their cue to purchase winter clothing, while the supermarkets benefited from Halloween,” said ONS statistician Kate Davies.

“This has also coincided with the strongest growth in internet sales seen for five years.”

The weather was not the only factor driving sales in October. Volumes excluding clothing grew by 1.3 per cent compared with September and sales grew for all store types apart from department stores. Analysts suggested higher spending from overseas visitors — attracted by the weaker currency — could have contributed to strong sales growth in recent months.

Economists said they believed the figures were also boosted by a rise in spending by foreign visitors following the dramatic drop in the value of the pound.

"Domestic residents may also be staying at home and spending here rather than booking a weekend away and taking a hit on the exchange rate," said Alan Clarke, an economist at Scotiabank.

“Clearly, this is a great start to fourth quarter GDP on the spending side,” also said Alan Clarke

Economists said the overall rise in retail sales was encouraging for the economy’s growth prospects in the final quarter of this year, but there were warnings that consumer spending could slow next year.

Non-store retailing, the smallest of the four main sectors in 2010, has experienced strong growth and is now the fastest growing sector

But the price index has been rising rapidly thanks to the stabilisation of global oil prices and the depreciation of sterling since June is expected to push it rapidly into positive territory soon.