British retail sales surged in October, as colder weather boosted clothing sales and supermarkets cashed in from Halloween, lifting annual sales growth to its highest in more than 14 years.
This morning; official data reinforce the robust picture of health given by British consumers since June’s vote to leave the European Union, even if the one-off factors lifting demand last month are unlikely to be sustained.
Longer term, the Bank of England and many other economists are concerned that rising prices will reduce households’ disposable income, and Thursday’s figures also showed store prices falling at the slowest pace since July 2014.
Retail sales volumes jumped by 1.9 percent on the month in October after edging up 0.1 percent in September, the Office for National Statistics said, almost double the highest forecast in a poll of economists.
Compared with a year earlier, sales volumes were up 7.4 percent last month versus forecasts for a 5.3 percent rise and 4.2 percent growth recorded in September, the biggest annual rise since April 2002.
However, Bank of England Governor Mark Carney warned this week that prices faced by British consumers will soon rise as stores start to pass on the near 20 percent fall in sterling since the referendum, eating into spending growth.
A survey of households on Wednesday showed the greatest concern about price rises in nearly two and a half years.
Strong retail sales growth is not expected to outweigh weakness in the rest of the economy.
Britain’s economy expanded by 0.5 percent in the third quarter, but the Bank of England expects this to slow next year.