(MENAFN) In an unexpected downturn, United Kingdom retail sales experienced a significant decline in October, with the Office for National Statistics (ONS) reporting a 0.3percent month-on-month drop in the volume of goods sold, contrary to economists' expectations of a 0.4percent increase. The latest figures reveal the lowest sales level since early 2021 when Covid-19 restrictions were in effect. Compared to the same period last year, October sales recorded a 2.7percent decrease, signaling a concerning trend.
The ONS report also highlighted a revised 1.1percent decline in September, worsening the outlook for the retail sector. Both economists and retailers attribute this unexpected slump to the ongoing cost-of-living crisis and adverse weather conditions. The adverse effects of the particularly wet second half of October are believed to have played a role in reducing footfall, dissuading consumers from making purchases, especially for autumn/winter clothing ranges.
Sandra Horsfield, an economist from Investec bank, noted that the weather impact, combined with the unusually warm September and early October, might have kept consumers away from shops, contributing to the overall sales decline. The gloomy figures raise concerns about the potential stagnation of the British economy, with fears of a winter recession looming.
The unexpected retail slump adds to the challenges facing the UK economy, and there is growing speculation that GDP could be revised to a negative reading. Horsfield emphasized the risk of a winter recession, attributing it to higher interest rates gradually impacting household and business finances. The unfolding economic scenario underscores the need for close monitoring and proactive measures to address the emerging challenges in the retail and broader economic landscape.
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.