Retail sales in October have beaten expectations according to the Office for National Statistics (ONS), as UK consumers “proved surprisingly resilient”.
The quantity bought last month compared with the same period last year dropped 0.3 per cent marking the first annual drop since 2013, but coming comfortably above the 0.6 per cent decline that was predicted.
Compared to September, October still saw growth of 0.3 per cent and on a three-month basis sales volumes rose 1.1 per cent year-on-year.
Meanwhile sales values rose 2.8 per cent last month. This disparity is largely due to rising inflation, seeing store prices rise 3.1 per cent compared to October 2016.
Food prices saw the largest year-on-year price increase in four years up 3.5 per cent, largely driving overall inflation.
Elsewhere, online retail sales continued to grow, increasing 10.7 per cent on last year accounting for 16.9 per cent of total spend.
“We are continuing to see an underlying picture of steady growth in retail sales, although this October suffered in comparison with a very strong October in 2016,” ONS Senior Statistician Kate Davies said.
“Growth month-on-month in October was particularly strong in the second-hand goods sector, which includes auction houses and antique dealers.”
Hargreaves Lansdown’s senior economist Ben Brettell said: “Today’s retail sales data provided the final piece in a pretty mediocre jigsaw for the UK economy this week.
“Inflation data and wage growth figures confirmed the squeeze on household incomes continues. But so far the UK consumer has proved surprisingly resilient, and retail sales have held up better than many expected.
“We’ve been waiting for the pay squeeze to filter through to the high street, and at first glance today’s numbers aren’t good news on that front.
“The monthly figures are volatile, and October 2016 was an exceptionally strong month, so the comparatives are tough. The rolling three-month figures still show an underlying trend of growth.
“The Bank of England says household consumption growth will slow from 1.5% to 1% in real terms next year, but that business investment and exports should pick up the slack in terms of aggregate demand. The overall picture remains lacklustre, but not disastrous.”