U.K. Retail Sales Hold Firm as Threat of No-Deal Brexit Looms
(Bloomberg) -- U.K. retail sales held up better than expected in September in the face of the intensifying Brexit crisis.
The quantity of goods sold rose 0.2% from August when auto fuel is excluded, the Office for National Statistics said Thursday. Sales including fuel were unchanged. Both measures were forecast to decline for a second month.
A buoyant labor market has supported consumer spending through the turmoil since the 2016 referendum. While heightened uncertainty is turning consumers more cautious, there are no signs of collapse.
In a separate report Thursday, the Bank of England said the availability of unsecured credit to households dropped slightly in the third-quarter, while credit-scoring criteria tightened. There was also an increase in defaults on credit cards, the BOE said.
Retail sales contributed modestly to economic growth in the third quarter, with ONS data showing sales rising 0.6% between July and September -- the same pace as in the previous three months. The increase was driven by non-store sales which include online operators such as Amazon, with other retail sectors displaying a further loss of momentum.
Food sales rose 0.6% in September and non-food sales gained 0.4%, boosted by spending on clothing and household goods. Non-store retailing declined for a second month following a bumper July.
Sales at department stores declined for the eight month in the past year, underlining the plight of the British high street where bricks-and-mortar retailers are battling online retailers.
Brexit talks remain stuck on the contentious Irish border issue. The crisis has hit companies from John Lewis to apparel retailer Ted Baker, which have been forced to cut prices to win business.
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