Fastest retail sales rise in 15 months suggests higher GDP growth in third quarter

UK retail sales are now growing at their fastest pace in 15 months in the year to September, according to the CBI. That's their third consecutive months of gains.

The headline CBI distributive trades survey number has risen from 27 to 34. Analysts had been expecting a fall to 24.

Now retail sales are expected to grow again in October - while growth in the motore trader continues but at a slower pace than in the previous two months.

Barry Williams, Asda chief merchandising officer for food, and chair of the CBI Distributive Trades Survey Panel, said

It’s encouraging to see the high street on the road to recovery, with particularly strong growth from furniture & carpet retailers, department stores and recreational goods retailers.

But the retail sector is not out of the woods yet with consumer confidence still fragile despite the rise in spending.

Howard Archer, chief UK and European economist, IHS Global Insight:

A robust CBI distributive trades survey for September provides reassurance that retail sales are holding up despite the latest hard data showing a 0.9% month-on-month dip in sales volumes in August following strong growth over the previous three months.

Consequently, it looks highly likely that consumer spending saw robust growth in the third quarter, supporting belief that the economy is likely to have grown even faster than the 0.7% quarter-on-quarter GDP expansion achieved in the second quarter.