UK retail sales fell more than expected in September, as “inflation fuelled by a post-Brexit vote fall in the pound continued to chip away at household budgets,” says The Independent.
Official figures showed that total sales across the retail sector decreased by 0.8% in volume terms last months compared to August, undershooting the 0.1% decline predicted by analysts.
Andrew Sentance, senior economic adviser to the consultancy PwC, said the slowdown could be blamed on inflation.
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“Prices of goods bought in shops, at petrol stations and online in September were 3.3% up on a year ago, whereas only a year ago they were falling by 1%,” he said.
“This surge in inflation – which mainly reflects the fall in sterling since the European Union referendum vote – is squeezing consumers and holding back the growth of retail spending in volume terms.”
Liberal Democrat Leader Vince Cable agreed saying that “a toxic combination of rising prices and stagnant wages” was “severely constraining household spending”.
The news meant that “third-quarter retail growth slowed to a year-on-year rate of 1.5%, its lowest since the second quarter of 2013,” says the BBC.
The broadcaster adds that the news may have a knock-on effect on the Bank of England as it contemplates its first interest rate rise in a decade.
“Sterling fell as traders bet the data made an imminent rate rise less likely.”
