span>span>Friday 22nd November 2024/span>span> - 07:55 (GMT)/span>/span>
UK retail sales contracted by 0.7% month-on-month in October, marking the steepest decline in four months and significantly undershooting forecasts of a 0.3% fall. The weak data, following a downwardly revised 0.1% rise in September, underscores fragile consumer confidence - with retailers blaming uncertainty surrounding the Budget announcement for the pullback.
Non-food stores led the decline, with sales dropping 1.4% as clothing sales fell by 3.1%, reversing September’s gains fuelled by seasonal promotions and favourable weather. Online sales also dipped by 1.2%, compounding the broad-based weakness. Year-on-year, retail sales growth slowed to 2.4%, below the revised 3.2% recorded in September and well under the 3.4% market expectation.
The disappointing figures weighed on the pound, which has been under pressure amid a challenging economic outlook. Sterling edged lower against major currencies, with traders interpreting the sales slump as further evidence of subdued consumer demand that could prompt the Bank of England to maintain a cautious stance on monetary tightening.
The data compounds existing headwinds for the pound, as lingering fiscal uncertainties and slowing economic momentum dampen investor sentiment. With inflation still elevated and fiscal policy adjustments on the horizon, the subdued retail performance adds another layer of complexity to the outlook for sterling and the broader UK economy.
