The UK’s retail sales decreased last month due to consumers refraining from spending money ahead of the Budget, according to official statistics. The Office for National Statistics (ONS) reported that sales volumes fell by 0.7% in October, with clothing shops experiencing a “notably poor” month. Tax increases that were predicted ahead of the Budget were blamed for the reluctance of households and businesses to make spending decisions. However, while the drop was worse than anticipated for October, overall retail sales had maintained their stability.
In the three months leading up to October, sales volumes rose by 0.8% when compared to the prior three months, according to the ONS senior statistician Hannah Finselbach, who said retail sales were expanding throughout the three-month and annual periods, despite being below pre-pandemic levels. Sales at clothing stores fell by 3.1% in October, with milder weather in that month delaying shoppers from buying winter clothes, according to separate surveys.
UK retail sales are the most recent data to indicate a disappointing economic performance. Earlier this week, data on government borrowing that exceeded expectations, and the most recent inflation figures demonstrated that prices have risen faster than estimated. Last week’s figures also showed that the economy barely grew between July and September.
According to Jacqui Baker, head of retail at RSM UK, the sales figures were “concerning,” since most retailers are now approaching their busiest period with Christmas only a few weeks away. Baker added that the Budget and falling interest rates should help improve consumer confidence, creating a clear path for Christmas spending
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