U.K. retail sales grew for the first time in three months in August as school uniform sales boosted clothing turnover.
Retail sales including automotive fuel advanced 0.2 percent month-on-month in August after staying flat a month ago, figures from the Office for National Statistics revealed Thursday. The rate matched economists’ expectations.
A marginal rise in August and no change in July left overall sales growth for the second quarter so far very weak. In the three months to July, retail sales volume gained only 0.4 percent.
While lackluster retail sales added to signs that economic growth has slowed in the third quarter, the outlook for retail sales and consumer spending still seems pretty bright, IHS Global Insight Economist Howard Archer said.
Ruth Miller at Capital Economics shared a similar view. The economist said retail sales are unlikely to give as much of a boost to GDP growth in the third quarter as they did in the first half of the year. But there are plenty of reasons to be optimistic about spending growth ahead.
Households’ discretionary spending power will see a further boost as inflation falls into negative zone again in coming months and regular pay growth continue to improve, the economist said. So sales should pick up pace again, Miller said.
Excluding auto fuel, growth in retail sales volume eased to 0.1 percent in August, as expected, from 0.3 percent in July.
Non-food store sales advanced 1.2 percent and within this category, clothing sales climbed 2.3 percent, which was the fastest since April. Automotive fuel sales climbed 1.3 percent in August, while food store sales fell 0.9 percent.
“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, an ONS official said.
On a yearly basis, retail sales including fuel climbed 3.7 percent after rising 4.1 percent. Economists had forecast 3.8 percent increase. This was the 29th consecutive month of annual growth.
Likewise, sales excluding auto fuel rose at a slower pace of 3.5 percent, following July’s 4.1 percent increase. It was also slower than a 3.8 percent rise forecast by economists.
The material has been provided by InstaForex Company – www.instaforex.com