The Zhitong Finance App learned that retail sales in the UK declined in September because consumers reduced food purchases, while higher than year-round temperatures hit demand for fall clothes. The UK Office for National Statistics (ONS) announced on Friday that total online and in-store product sales fell 0.4%, and economists had previously expected a 0.1% decline. The previous month of August was a 0.7% increase after the upgrade.
Overall sales increased by 0.7% in the third quarter, contributing 0.03 percentage points to overall economic growth. British consumers, who account for about 60% of the UK's economic activity, have previously fared better than expected against “Iran shock” — summer spending was boosted by political optimism and the World Cup.
However, an early Friday survey showed that consumer confidence declined sharply this month, further indicating that they are already beginning to feel the pressure. Prior to this round of decline, the price of diesel hit a record of £2 per liter, and mortgage interest rates approached 6%. Meanwhile, the British are preparing for a jump in energy bills at the beginning of the new year — an increase that is expected to push inflation above 4% and force the Bank of England to raise interest rates as early as November.
Chancellor of the Exchequer John Healey (John Healey) has said he plans to announce a new round of cost-of-living support measures in next week's budget; however, given the state of public finances, there is limited room for him to implement large-scale concessions.