Retail sales fell in October as Budget fears hit spending
Getty ImagesRetail sales fell last month as shoppers held back spending ahead of the Budget, according to official data.
The Office for National Statistics (ONS) said sales fell by 0.7% in October, with sales in clothing stores “particularly poor”.
Speculation over what taxes might be raised ahead of last month’s Budget is thought to be a reason households and businesses are more reluctant to make spending decisions.
The ONS said that while last month’s fall was larger than expected, wider trends suggested sales had been strong.
Sales in the August-October period increased by 0.8% compared with the previous three months.
Hannah Finselbach, senior statistician at the ONS, said: “When we look at the wider trends, retail sales have grown in both the three-month and annual periods, although they remain below pre-pandemic levels.”
She said October’s fall “was due to particularly poor sales in clothing stores, but all retailers reported that consumers were holding back on spending ahead of the Budget”.
Sales at clothing stores fell 3.1% in October, with separate surveys showing warmer weather last month meant shoppers put off buying warm clothing.
The retail sales data was the latest in a series of disappointing economic data.
Earlier this week, data showed Government borrowing higher than expectedalthough Latest inflation data Prices are rising faster than expected.
Last week’s data showed The economy is barely growing Between July and September.
Retailers were among the businesses that complained most loudly about the tax increases announced in last month’s budget.
On Tuesday, many of Britain’s biggest chains – including Tesco, John Lewis and Marks & Spencer – Write to Chancellor Rachel Reeves Arguably, job losses in the industry are “inevitable” and prices will rise due to higher taxes and other costs.
Jacqui Baker, head of retail at RSM UK, said the figures were “worrying” given that most retailers are now entering their busiest time of the year, with Christmas just weeks away.
“With the end of the second half of the year approaching and relatively mild weather, consumers are delaying purchases of winter coats and boots,” she said.
“This makes it difficult for retailers to move inventory, especially since many retailers have delayed spending to take advantage of Black Friday deals.”
However, she added that with the Budget completed and interest rates falling, this should “help boost confidence and create a clear path for Christmas spending”.
There was better news for retailers in another survey, which showed consumer confidence improved this month.
Neil Bellamy, director of consumer insights at GfK, which led the survey, said that while there had been “nervousness in recent months” ahead of the Budget and the US election, “we are now behind these events” .
However, he added that it was too early to expect a major improvement in consumer sentiment.
“Recent data shows that inflation has not yet been contained, people are still feeling severe cost of living pressures, and it will take time for the new British government to deliver on its promise of ‘change’.”
