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Bargain hunters prop up retail sales in August | Bargain hunters prop up retail sales in August |
(35 minutes later) | |
Britain’s high street stores kept up their record of monthly sales increases in August as shoppers were lured by heavy price discounting, according to official figures. | Britain’s high street stores kept up their record of monthly sales increases in August as shoppers were lured by heavy price discounting, according to official figures. |
The sales rise stretches back to June 2014 and is likely to be leapt on by hawks on the Bank of England’s monetary policy committee as a sign of strength in the economy and another reason to raise interest rates as early as next spring. | The sales rise stretches back to June 2014 and is likely to be leapt on by hawks on the Bank of England’s monetary policy committee as a sign of strength in the economy and another reason to raise interest rates as early as next spring. |
But the volume of goods sold in retail outlets managed only a 0.2% increase from July, which one analyst described as “fairly feeble”. | But the volume of goods sold in retail outlets managed only a 0.2% increase from July, which one analyst described as “fairly feeble”. |
Related: Slowdown in UK internet sales may signal online shopping peak | |
Heavy discounting has pushed down retail prices by 3.3% since August 2014 and it is possible to track back the year-long rise in sales to the month prices started to tumble. Although much of the fall in prices can be accounted for by lower petrol prices, bargain-hunting shoppers have also kept prices low in other sectors. | Heavy discounting has pushed down retail prices by 3.3% since August 2014 and it is possible to track back the year-long rise in sales to the month prices started to tumble. Although much of the fall in prices can be accounted for by lower petrol prices, bargain-hunting shoppers have also kept prices low in other sectors. |
Furniture and household goods have shown the strongest growth in volume sales over that past year while food has stagnated. | Furniture and household goods have shown the strongest growth in volume sales over that past year while food has stagnated. |
The ONS’s head of retail sales statistics said growth was coming evenly from small and large retailers, which both rose by 0.9% in August. “Small stores were particularly boosted in August by sales of school uniforms, while most of the growth in large stores was coming from online,” Kate Davies said. | The ONS’s head of retail sales statistics said growth was coming evenly from small and large retailers, which both rose by 0.9% in August. “Small stores were particularly boosted in August by sales of school uniforms, while most of the growth in large stores was coming from online,” Kate Davies said. |
Ruth Miller, UK economist at Capital Economics, said: “August’s retail sales figures showed that the pace of spending growth has remained fairly feeble so far this quarter. But we doubt that this signals a more widespread slowdown in the consumer recovery. | Ruth Miller, UK economist at Capital Economics, said: “August’s retail sales figures showed that the pace of spending growth has remained fairly feeble so far this quarter. But we doubt that this signals a more widespread slowdown in the consumer recovery. |
“But there are plenty of reasons to be optimistic about spending growth ahead. The fundamental drivers of spending remain robust. Households’ discretionary spending power will see a further boost as inflation dips once more into negative territory in coming months. Meanwhile, annual growth in regular pay has continued to strengthen, rising to its strongest since late-2008. So sales should start rising again soon.” | “But there are plenty of reasons to be optimistic about spending growth ahead. The fundamental drivers of spending remain robust. Households’ discretionary spending power will see a further boost as inflation dips once more into negative territory in coming months. Meanwhile, annual growth in regular pay has continued to strengthen, rising to its strongest since late-2008. So sales should start rising again soon.” |
Howard Archer, chief UK economist at IHS Global Insight, said: “Modest retail sales growth in August adds to the evidence that the economy has hit a soft patch in the third quarter. The sales data reinforce our belief that third-quarter GDP growth is unlikely to come in any better than 0.5% quarter-on-quarter, which would be down from expansion of 0.7% quarter-on-quarter in the second quarter.” | Howard Archer, chief UK economist at IHS Global Insight, said: “Modest retail sales growth in August adds to the evidence that the economy has hit a soft patch in the third quarter. The sales data reinforce our belief that third-quarter GDP growth is unlikely to come in any better than 0.5% quarter-on-quarter, which would be down from expansion of 0.7% quarter-on-quarter in the second quarter.” |
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