UK retail sales drop as consumer confidence falls

Wednesday 25th October 2023 05:56 EDT

UK retail sales volumes fell by 0.9% in September, surpassing economists' expectations of a 0.2% decline. This decline, following a 0.4% drop in August, was primarily driven by online retailers, who experienced a 2.2% decrease in sales volumes, as reported by the Office for National Statistics.
Non-food store sales volumes dropped by 1.9% last month, attributed to ongoing cost of living pressures and unseasonably warm weather affecting autumn clothing sales. However, this was partly offset by a 0.2% increase in food store sales volumes and a 0.8% rise in automotive fuel sales volumes, rebounding from a 1% drop the previous month. In the three months leading to September, sales volumes declined by 0.8% compared to the previous three months, though the value of those sales increased by 0.3%. UK inflation remained stable at 6.7% in September, matching the previous month's figure. While food price inflation was slowing, petrol prices continued to rise.
Neil Birrell, Chief Investment Officer at Premier Miton Investors, stated that it's unsurprising to see the consumer sector facing challenges. He also noted that this data is likely viewed favourably by the Bank of England, although it may not significantly impact their policy decisions.
Amidst rising prices, mortgage, and rental expenses, the UK's closely monitored consumer confidence survey conducted by GfK experienced its most significant month-on-month decline in over three years in October. The GfK Consumer Confidence Index dropped by four points to -17, marking its third consecutive monthly decrease as increased interest rates took a toll on households.

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