Retail sales up with gadgets boost

Retail sales grew more than expected in September after a surprise increase in sales of laptops and video games, the Office for National Statistics said.

The ONS said sales volumes including automotive fuel rose by 0.6 per cent on the month after a fall of 0.4 per cent in August, giving an annual rise of 0.6 per cent. Analysts had forecast flat sales on the month and an annual rise of 0.7 per cent.

Excluding fuel, retail sales went up 0.7 per cent on the month and were 0.4 per cent higher on the year, above analyst s' expectations for the monthly rise.

The figures offer a rare bit of good news for British retailers which otherwise have been struggling. Rising prices, muted wage growth and government austerity measures have forced shoppers to rein in purchases not only of non-essential goods but also of groceries, traditionally the most resilient area of spending.

Sales at 'other stores' rose by 2.3 per cent on the month, the biggest increase since October 2010, which the ONS said was largely down to back-to-school sales of laptops and a number of big video game launches.

However, clothing sales fell 2.1 per cent on the year, their biggest annual fall since April 2008.

On Wednesday Britain's top household goods seller, Home Retail, which owns the Argos catalogue stores, reported a 70 per cent slump in first-half profit, prompting its chief executive to call on the government to help consumers. Earlier this month supermarket chain Tesco posted one of its biggest-ever quarterly falls in underlying sales.

The slide in consumer spending threatens Britain's faltering economic recovery as consumers account for about two-thirds of its gross domestic product.

Economists expect the retail sector to remain under pressure for the rest of this year, not least from high inflation. Inflation hit a three-year high in September at 5.2 per cent, the second-highest annual rate in the European Union.