Weak retail sales data could force interest rates rethink
Sterling falls on September's 0.8% retail decline as traders bet against Bank of England rates rise
UK retail sales fell more than expected in September, as “inflation fuelled by a post-Brexit vote fall in the pound continued to chip away at household budgets,” says The Independent.
Official figures showed that total sales across the retail sector decreased by 0.8% in volume terms last months compared to August, undershooting the 0.1% decline predicted by analysts.
Andrew Sentance, senior economic adviser to the consultancy PwC, said the slowdown could be blamed on inflation.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
“Prices of goods bought in shops, at petrol stations and online in September were 3.3% up on a year ago, whereas only a year ago they were falling by 1%,” he said.
“This surge in inflation – which mainly reflects the fall in sterling since the European Union referendum vote – is squeezing consumers and holding back the growth of retail spending in volume terms.”
Liberal Democrat Leader Vince Cable agreed saying that “a toxic combination of rising prices and stagnant wages” was “severely constraining household spending”.
The news meant that “third-quarter retail growth slowed to a year-on-year rate of 1.5%, its lowest since the second quarter of 2013,” says the BBC.
The broadcaster adds that the news may have a knock-on effect on the Bank of England as it contemplates its first interest rate rise in a decade.
“Sterling fell as traders bet the data made an imminent rate rise less likely.”
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
India elections start amid violence, hate speech accusations
Talking Points Narendra Modi seeks a third term while critics worry about the future of the country's democracy
By Joel Mathis, The Week US Published
-
'Biden is smart to keep the border-security pressure on'
Instant Opinion Opinion, comment and editorials of the day
By Harold Maass, The Week US Published
-
Bird flu worries mount as virus found in milk, cows
Speed Read The FDA found traces of the virus in pasteurized grocery store milk
By Peter Weber, The Week US Published
-
How did America avoid a recession in 2023?
Today's Big Question A downturn was inevitable. Until it wasn't.
By Joel Mathis, The Week US Published
-
Will the UK economy bounce back in 2024?
Today's Big Question Fears of recession follow warning that the West is 'sleepwalking into economic catastrophe'
By Chas Newkey-Burden, The Week UK Published
-
What rising gold prices can tell us about the economy in 2024
The Explainer Market hits all-time high, boosted by a weakening US dollar and rising global tensions
By Flora Neville, The Week UK Published
-
Would tax cuts benefit the UK economy?
Today's Big Question More money in people's pockets may help the Tories politically, but could harm efforts to keep inflation falling
By The Week UK Published
-
Interest rates: more ‘trauma’ for households
Talking Point Latest hike will cause ‘plenty of pain for borrowers’
By The Week Staff Published
-
Why aren’t soaring interest rates bringing down inflation?
Today's Big Question PM pins blame for stubborn inflation on fixed-rate mortgages, but economists say the picture is more nuanced
By Arion McNicoll Published
-
Sticky inflation and sluggish growth: why does UK economy continue to struggle?
Today's Big Question Food prices, Brexit and the Bank of England have been blamed for poor economic performance
By Chas Newkey-Burden Published
-
Is it time for Britons to accept they are poorer?
Today's Big Question Remark from Bank of England’s Huw Pill condemned as ‘tin-eared’
By Chas Newkey-Burden Published