Thursday 17 October 2019 10:20 am

UK retail sales growth holds steady as Brexit day approaches

Growth in UK retail sales held steady in the third quarter of the year, official figures have shown, as shoppers remained cautious in the run-up to the October Brexit deadline.

Read more: UK unemployment rate rises as Brexit fears hit labour market

Britons bought 0.6 per cent more goods in the second quarter than in the previous three months, matching the 0.6 per cent rise seen in the three months to August, the Office for National Statistics (ONS) said.

The increase helped UK retail sales grow by 3.1 per cent in September compared to a year earlier, rising from 2.7 per cent in the year to August.

Consumer spending has been a bright spot in an otherwise gloomy economy. British GDP shrank in the second quarter by 0.2 per cent, dragged down by a shrinking manufacturing sector.

The number of people without work rose in the three months to August, however, suggesting that Britain’s strong consumer sector could be about to weaken.

ONS head of retail sales Rhian Murphy said: “Retail sales growth remained steady in the latest three months, following strong summer online sales.” 

“Food shops bounced back after a weak few months, but there was yet more bad news for department stores with sales continuing to fall in September.”

Duncan Brewer, retail expert and partner at consultancy Oliver Wyman, said the growth in sales over the last three months “is despite the turbulent times and uncertain future”. 

“It appears that consumers are starting to stockpile in anticipation of a no-deal Brexit,” he said. 

Ruth Gregory, senior UK economist at consultancy Capital Economics, said the figures “were perhaps a bit of a relief given the intense Brexit uncertainty”.

She said they suggest “that the quarterly rate of consumption growth may have held steady at 0.4 per cent quarter on quarter in the third quarter”.

Read more: Falling fuel prices hold UK inflation at three-year low

“Overall, then, the figures leave us comfortable with our forecast for GDP growth of 0.4 per cent in the third quarter.”

(Image credit: Getty)

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