Retail sales remain strong despite household pressures

Retail sales remain strong despite household pressures

Excluding fuel sales, retail sales grew 1.2% month-on-month, compared with forecasts for a 0.4% gain and with the upwardly revised 0.4% gain recorded last month.

The volume of goods bought in the United Kingdom rose by 1.1 per cent compared with October and was 1.6 per cent higher than a year ago, figures from the Office for National Statistics show.

"Christmas day falls on a Monday this year - last time that happened, in 2006, the Friday before was the most popular day for grocery shopping that year", said Fraser McKevitt, head of retail and consumer insight at the company.

Consumers have been squeezed through most of this year by rising inflation which hit its highest in almost six years last month, at a time when wages are failing to keep up.

That led economists to suggest the rise in sales may be temporary: Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said the surge does "not signal broader consumer strength".

The reaction by the market was muted and some said the increase in retail sales could reflect spending for Christmas being move forward to enjoy the discounts offered on Black Friday.

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Nevertheless, the latest figures could provide reassurance to the country's central bank, the Bank of England, which increased its interest rates for just the first time in more than a decade in November and will publish it most recent rate decision Friday at noon.

Stores specializing in household goods reported that promotions on Black Friday boosted sales, with the number of household electric appliances sold moving higher by over 9% compared to October.

"The official data are failing to fully adjust for the new seasonal pattern generated by Black Friday, which only gained traction in the United Kingdom three years ago", he said.

But the picture was less rosy when comparing the past three months with the same period a year earlier - smoothing out monthly volatility. City economists had forecast growth of 0.4%.

Still, the sales figures are encouraging for the health of the economy, providing a shot in the arm for retailers hit by higher inflation driving up their costs and potentially discouraging shoppers.

The ONS said that the quantity of food bought in November fell by 0.1% compared to the same month previous year.

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