19.12.201909:17:00UTC+00UK Retail Sales Fall Unexpectedly

UK retail sales declined unexpectedly in November as consumers curbed spending ahead of general election.

Retail sales volume, including auto fuel, decreased 0.6 percent on a monthly basis, after remaining unchanged in October, the Office for National Statistics reported Thursday.

This was the biggest fall seen so far this year. Sales were expected to grow 0.2 percent.

Food store and non-food store sales fell 0.6 percent and 0.2 percent, respectively.

Excluding auto fuel, retail sales volume dropped 0.6 percent after a 0.1 percent decrease in October and confounding expectations for an increase of 0.3 percent.

The official Black Friday was on November 29 and outside the November reporting period.

On a yearly basis, retail sales logged its slowest growth since October 2017. Sales grew only 1 percent largely due to a 1.1 percent decrease in non-food stores in November. Economists had forecast sales growth to ease moderately to 2.1 percent from 3.1 percent in October.

Excluding auto fuel, retail sales growth slowed notably to 0.8 percent from 2.7 percent. This was also weaker than the expected 2 percent.

In three months to November, retail sales decreased 0.4 percent when compared with the previous three months. This was the first decline since April 2018.

Given the falls in October and November, it will be very difficult for retail sales volumes to grow at all in the fourth quarter as a whole, Thomas Pugh, an economist at Capital Economics, said. So not a very merry Christmas for retailers.

The Bank of England is set to announce its interest rate decision later today. The bank is expected to hold its rate at 0.75 percent and asset purchase plan at GBP 435 billion.