Fears of fourth quarter slump in UK sparked by retail sales dip

City A.M. Reporter
UK RETAIL sales fell in October as shoppers bought less food and clothing, puncturing a consumer spending revival that policymakers hoped would kick-start the economy heading into 2013.

Sales volumes fell 0.8 per cent on the month for an annual rise of just 0.6 per cent, the Office for National Statistics said yesterday.

Both numbers were the weakest since April and much worse than forecast, and sent sterling lower against the dollar and the euro during the day’s trading.

Food shops reported the biggest monthly decline in sales since November 2011.

“I think a contraction in GDP is on the cards for the fourth quarter,” warned Rob Wood of Berenberg Bank.

Britons have suffered the biggest drop in disposable incomes for more than 30 years as soaring prices and higher taxes have eaten away at barely-rising pay packets.