- Title: Colder weather helps UK retail sales growth to 14-year high - ONS
- Date: 17th November 2016
- Summary: LONDON, ENGLAND, UK (NOVEMBER 17, 2016) (REUTERS) (SOUNDBITE) (English) FIDELITY WORLDWIDE INVESTMENT, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "I think that the UK economy has done better than people expected in the aftermath of the Brexit vote but looking further ahead the uncertainly about what exactly the Brexit negotiations will look like will begin to weigh on investment and consumption in the UK economy."
- Embargoed: 2nd December 2016 12:35
- Keywords: Britain economy colder weather helps UK retail sales growth 14-year high ONS
- Location: LONDON, ENGLAND, UK
- City: LONDON, ENGLAND, UK
- Country: United Kingdom
- Topics: Economic Events
- Reuters ID: LVA00458U1U31
- Aspect Ratio: 16:9
- Story Text: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.
Thursday's (November 17) 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 Reuters 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.
"I think what it reflects is that August and September were particularly difficult months for UK retailers so there's a bit of a bounce back. The cooler weather in October helped, people went out and bought winter clothing and also Halloween gave retail sales a bit of a boost," said Tom Stevenson, Investment Director, Fidelity Worldwide Investment.
Retail sales are often volatile on a monthly basis, and clothing is particularly sensitive to the weather. But even looking at the three months to October as a whole, sales were 5.9 percent higher than a year earlier, the biggest rise since June 2002.
Clothing sales gained 5.1 percent on the month - their biggest rise since March 2014, while internet sales were more than a quarter higher than in October 2015.
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.
"I think that the UK economy has done better than people expected in the aftermath of the Brexit vote but looking further ahead the uncertainly about what exactly the Brexit negotiations will look like will begin to weigh in investment and consumption in the UK economy," added Stevenson.
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