- REUTERS/Suzanne Plunkett
LONDON – Retail sales in the UK jumped during the month of August.
Brits continued to spend strongly on non-essential items, looking beyond the price increases brought about by the pound’s post-referendum slump, new data from the ONS shows.
Sales grew by 2.4% on a year-on-year basis, the ONS said, up from just 1.4% in July, and even further ahead of the 1.1% growth that had been forecast by economists polled prior to the release.
On a month-to-month basis, growth was 1%, compared to an expected 0.2%, the data showed.
“Within this month’s retail sales we are seeing strong price increases across all store types compared with a year ago, reflecting wider inflationary pressures,” Kate Davies, a senior statistician at the ONS, said.
“However, we are still seeing underlying growth in sales volumes, and with strong growth in non-essential purchases as consumers continued to buy more from non-food stores.”
On a three-monthly basis, the volume bought increased 1.2%.
Three-month retail sales movements are generally seen as more reliable than a single month’s data, which can be volatile, as June’s big jump shows.
Here’s the chart showing the overall retail sales trend:
And here is the ONS’ breakdown of the types of shopping that drove the increased overall retail sales:
Prices in British shops continued to rise in August, the ONS said, reflecting the wider increase in overall inflation over the last year as the depreciation of the value of the pound seen since the vote. That fall has pushed up the price of imports, which then filters into consumer products.
“Consistent with the Consumer Prices Index (CPI), rising prices in clothing stores and petrol stations provided the main contribution to store price inflation, with average prices in petrol stations increasing by 5.0% and in textile, clothing and footwear stores increasing by 4.2%,” the ONS’ statistical bulletin said.
“Despite the price increases in clothing stores, likely to be as a result of sales promotions ending, consumers continued to buy more from these stores and feedback from businesses suggests that footwear stores fared well with back-to-school items this August.”
The pound jumped on the news of the data, climbing by around 0.5% against the dollar, as strong price rises in the shops add to the data supporting a hike in interest rates from the Bank of England. Here’s the chart:
- Markets Insider