British retail sales recorded their strongest quarter of growth since late 2014 in the three months to September, but warm weather and higher prices dented demand for new clothing towards the end of the period.
Britain’s statistics agency said consumer sentiment had remained firm since June’s vote to leave the European Union, and that the sector would make a robust contribution to economic growth during the third quarter.
In the three months to September, retail sales volumes grew by 1.8 percent on the quarter, the fastest rate since the fourth quarter of 2014 and up from 1.1 percent in the three months to June.
Compared with a year earlier, third-quarter sales volumes were 5.4 percent higher, again the strongest calendar quarter since Q4 2014.
But in September alone they disappointed economists’ forecasts in a poll for a 0.4 percent rise, as there was zero growth.
A survey of households on Wednesday showed the greatest concern about price rises in nearly two years, and official data on Tuesday showed the biggest monthly increase in the inflation rate since June 2014.
Britain’s economy expanded by 0.7 percent in the three months to June, but the Bank of England expects this to slow to 0.3 percent in the current quarter.
This is a smaller decline than most economists expected just after the Brexit vote and few now expect the BoE to follow through with another rate cut next month after it cut rates to a record low 0.25 percent in August.
The euro was trading near a three-month low against the dollar before the European Central Bank meeting later today, with the focus on whether President Mario Draghi will indicate that the bank is poised to taper its bond purchase programme.
The ECB is not expected to make any changes to its asset purchase programme until December, but investors want more clarity from Draghi about recent speculation that the bank could start tapering down its bond purchases.