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UK retail sales see surprise rise in October | UK retail sales see surprise rise in October |
(40 minutes later) | |
UK retail sales rose 0.6% in October from the month before, the Office for National Statistics (ONS) has said. | |
Analysts had expected sales to fall, but a spate of pre-Christmas sales and promotions helped to lure shoppers, with prices down 0.4% in the month. | |
The ONS said the food sector had seen a boost in October, driven mostly by price promotions. | |
Sales volumes in small stores rose 5.3% year-on-year - the biggest increase since November 2004. | Sales volumes in small stores rose 5.3% year-on-year - the biggest increase since November 2004. |
This rise was put down to shoppers avoiding larger stores in out-of-town centres in order to cut down on petrol costs. | |
"The retail sales figures were better than expected, although longer-term comparisons still point to a flat picture," said David Kern, chief economist at the British Chambers of Commerce. | "The retail sales figures were better than expected, although longer-term comparisons still point to a flat picture," said David Kern, chief economist at the British Chambers of Commerce. |
"While the improvement in sales is welcome, the relentless squeeze on disposable incomes will put pressure on people's ability to spend in the next few quarters," he added. | "While the improvement in sales is welcome, the relentless squeeze on disposable incomes will put pressure on people's ability to spend in the next few quarters," he added. |
Howard Archer, chief UK and European economist at IHS Global Insight, said the latest sales figures provided a "significant boost to the hope that the economy can keep growing". | Howard Archer, chief UK and European economist at IHS Global Insight, said the latest sales figures provided a "significant boost to the hope that the economy can keep growing". |
However, he added that shoppers were likely to be "very cautious in their spending for some considerable time to come". | However, he added that shoppers were likely to be "very cautious in their spending for some considerable time to come". |
Confidence low | |
Despite the better-than-expected sales figures, a number of updates from High Street retailers indicated that many chains are still struggling in the current economic environment. | |
Fashion chain French Connection said its UK sales had slowed because of the recent unseasonably warm weather, and that it was unlikely to meet its annual profit forecasts. | |
Mothercare reported a half-year loss of £81.4m after problems with its UK operations. The company is already planning to close 110 of its UK stores and it has now announced a review of its whole UK business. | |
Earlier on Thursday, the latest monthly consumer confidence index from the Nationwide found that confidence in October had fallen to the lowest level since the survey began in May 2004. | Earlier on Thursday, the latest monthly consumer confidence index from the Nationwide found that confidence in October had fallen to the lowest level since the survey began in May 2004. |
The index fell for the fifth month in a row last month to a value of 36, well below the long-running average of 78. | The index fell for the fifth month in a row last month to a value of 36, well below the long-running average of 78. |