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Retail sales rise strongly

The latest retail sales figures proved to be much stronger than analysts had been expecting as UK consumers continued their summer spending spree.

Official data published by ONS showed that retail sales volumes increased by 0.3% between July and August. In comparison, the consensus market forecast had predicted a 0.2% drop in sales during that period.

Across the three months to August as a whole, which smooths out monthly volatility in the data, the growth in sales was 2.0%. This was down from 2.4% in the three months to July, but still represents solid growth in sales volumes.

Commenting on the data, ONS senior statistician Rhian Murphy said:

“Retail sales remained strong in the three months to August, with continued growth across all sectors. Food and household goods stores particularly bene ted from the warm weather when compared with last summer.”

The latest monthly Distributive Trades Survey published by the Confederation of British Industry (CBI) also suggests that, while sales volumes growth did slow slightly in September, they remained in line with the long-run average and that firms expect sales to hold up this month as well.

Anna Leach, CBI Head of Economic Intelligence, did, however, add a note of caution saying: “As we head into autumn, retailers have seen the run of decent sales figures continue. But underlying conditions are clearly tougher, with the sector facing significant challenges – from squeezed household incomes, changing consumer habits to digital disruption.”

And economists are still warning that spending could slow across the rest of this year as a combination of relatively weak growth in real incomes and heightened political and Brexit-related uncertainty makes consumers more cautious. However, the strong growth in sales witnessed over the summer months has certainly brought some much-needed cheer to the beleaguered retail sector.

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.

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