UK retail sales surge past forecasts in October, ONS reveals

UK retail sales soared last month, advancing by 0.8% month-on-month and 4.3% on the year, according to the Office for National Statistics (ONS), led by non-food sales, while prices fell at their quickest pace in over a decade.

The consensus estimate had been for a gain of 0.3% month-on-month and 3.8% year-on-year. In September retail sales volumes dropped 0.4%.

Food sales were up by 0.3% on the month and non-food ones by another 1.5%, with sales of household goods rising at a monthly clip of 2.6%. Non-store retailing dipped 0.6% in terms of monthly rates of change, while sales of automotive fuel did so by 1%.

In terms of quarterly rates of change, sales volumes increased 0.4%, marking the twentieth consecutive month of growth. That marks the longest period of expansion since November 2007.

Sales however have slowed down from growth of 0.8% seen in the first quarter and the 1.6% advance registered in the second quarter, Chris Williamson, chief economist at Markit pointed out.

Excluding sales of automobiles, retail sales also registered a rise of 0.8% over the month (consensus: 0.3%).

Wages starting to show signs of picking up

“With wages starting to show signs of picking up and few signs of imminent interest rate hikes, consumers are starting to feeling brighter, which should support spending in coming months,” Williamson added.

Meanwhile, average store prices fell 1.5% year-on-year, the largest drop since December 2002, as petrol prices declined. Petrol/diesel prices were at their lowest level since the end of 2010, ONS explained.