- A Reuters poll of economists had forecast a 0.5% rise in retail sales volumes
- E-commerce spending fell by 4.3%, the biggest contraction since March 2022
Retail sales staged a weaker than expected recovery last month, following a significant decrease in clothing and online purchases.
The volume of goods bought across the country increased by 0.2 per cent in the four weeks to 23 November, according to the Office for National Statistics (ONS).
Although this was an improvement on the 0.7 per cent fall in October, a Reuters poll of economists had forecast a 0.5 per cent rise.
E-commerce spending declined by 4.3 per cent, the biggest contraction since March 2022, while the proportion of online sales shrunk by 1.3 percentage points to 26.2 per cent.
Clothing store sales shrank by 2.6 per cent, with the ONS noting ‘economic factors’ were impacting demand.
Consumer confidence has remained subdued following the late October Budget, which saw Chancellor Rachel Reeves announce hikes to National Insurance rates and National Living Wage.
Modest: The volume of goods bought across Great Britain increased by 0.2 per cent in the four weeks to 23 November, according to the Office for National Statistics (ONS)
The Bank of England and many retailers have since warned that the measures will cause price rises and stoke inflation, dampening the short-term chances of an interest rate reduction.
However, the ONS reported food store sales volumes expanded by 0.5 per cent, the first increase in three months, thanks to strong supermarket trading.
Purchases at household goods stores also grew by 1.1 per cent on the back of robust trade at furniture outlets.
The reporting period covered the half-term holidays but not Black Friday, which was on 29 November, but the ONS said some retailers noted sales’ started well in advance’ of that day.
Jacqui Baker, head of retail at RSM UK, said: ‘Black Friday is a crucial event for the sector; its performance determines how heavily retailers will have to discount in December and for many, it can be the saviour for the month.
‘December will be the last chance for retailers to get as much stock as possible out the door before the next quarter – a typically slower period where consumers opt to stay in and save, rather than splurge.’
The ONS retail sales figures come one day after the Bank of England held the UK base rate at 4.75 per cent and warned of zero growth in the final quarter of this year.
Interest rates gradually rose from a record low of 0.1 per cent to 5.25 per cent between late 2021 and the summer of 2023 in response to soaring energy prices and loosening Covid-related curbs boosting inflation.
While the country’s inflation rate has subsequently come down, it rose to 2.6 per cent in the 12 months to November, spurred by higher fuel, clothing and gig ticket prices.
Earlier in the week, the ONS revealed that UK pay growth accelerated to 5.2 per cent in October following a solid jump in salaries for skilled manufacturing staff.
Danni Hewson, head of financial analysis at AJ Bell, said: ‘After those lockdown years and the past couple since when rising prices and interest rates forced us all to reign in our spending, this year things feel a bit different.
‘People have a bit more money in their pockets thanks to those above-inflation wage increases, and they’re more than ready to cast off the gloom, even if it’s just for a few fun-filled festive days.
‘But budgets will still be closely watched, because the last couple of years have made us all acutely aware that we can only spend a pound once, and that pound won’t buy as much as it used to.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .