Business

UK retail sales see stronger-than-expected rise

Shoppers on London's Oxford Street
Image caption September's retail data beat forecasts, but clothing sales were still down on the year

UK retail sales rose by 0.6% in September, according to the latest figures from the Office for National Statistics (ONS).

That was stronger than analysts had forecast and more than reversed a 0.4% fall in volumes in August.

The ONS also reported that sales were 0.6% higher than September last year.

A rise in laptop and computer game sales helped to boost the numbers. The ONS also said sales made over the internet continued to climb.

Non-store retailing, including online purchases, rose by 15.5% over the year as a whole.

The ONS estimates that internet sales accounted for 9.6% of all retail spending in September, excluding petrol.

However, textile, clothing and footware sales volumes were 2.1% lower than in the previous year, the sector's biggest annual fall since April 2008.

"That's quite bad for what they would expect that month," ONS statistician Aileen Simkins told the BBC.

"Maybe that was just the effect of the warm weather towards the end of the month, and people weren't really wanting to go out and start shopping for winter outfits yet."

Muted reaction

The data follows last week's report that unemployment rose to 2.57 million, a 17-year high, between June and August.

Media playback is unsupported on your device
Media captionAileen Simkins from the ONS says small stores are growing faster than bigger stores

And on Tuesday, the ONS reported that consumer price inflation had risen to 5.2% - the highest rate for three years.

Economists warn such pressures are likely to make consumers cautious about spending.

"September's retail sales figures are a bit stronger than we and the consensus had expected, but hardly suggest that conditions are back to normal on the High Street," said Samuel Tombs, UK economist at Capital Economics.

"Most of the monthly rise in sales in September... reflected a bounce back from August's weak sales, which were probably depressed a bit by the riots at the start of the month."

August's 0.4% sales drop was downwardly revised from the original estimate of a 0.2% decline. That will have helped increase the size of September's gain.

Commerzbank's Peter Dixon said September's sales figures were unlikely to make the Bank of England reconsider its view that the economy needs stimulus.

"This [retail sales] number we have to welcome as a ray of light amongst the gloom, but until we see signs this is being repeated over the course of a few months, then it doesn't have any policy implications," Mr Dixon said.

The British Chambers of Commerce also warned against complacency.

"The difficult international situation, the government's austerity measures, and high inflation will continue to put pressure on businesses and consumers and we have to accept that economic growth will remain weak in the next few quarters," said David Kern, the BCC's chief economist.

Related Internet links

The BBC is not responsible for the content of external Internet sites