U.K. Retail Sales Rise as Christmas Shopping Kicks Off Early
(Bloomberg) -- U.K. retail sales rose for a sixth straight month in October, helped by early Christmas shopping as consumers moved to get ahead of virus lockdowns that closed stores.
The volume of sales increased 1.2%, defying economists’ expectations for a modest decline, according to data published Friday. But another report on household confidence gave reason for concern, showing that sentiment is subdued and people are more worried about their personal finances.
“Low confidence is the enemy of recovery,” said Joe Staton, a director at GfK, which publishes the sentiment index. “The second lockdown couldn’t have come at a worse time for the U.K.’s high-street retailers.”
Most retail sectors have now recovered to pre-crisis levels, apart from clothing and fuel, the Office for National Statistics said Friday. Online shopping, which has boomed during the pandemic, is up 45% compared with February.
But retailers are set to take another hit this month during the government’s latest lockdown. Pantheon Macroeconomics forecasts that sales could plunge 10%, though they will bounce back in December if the restrictions on non-essential stores are lifted.
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The fallout from the virus has left many businesses in financial trouble, forcing them to cut jobs or shutter stores. Earlier this month, grocery chain J Sainsbury Plc said it’s closing 420 Argos stores and starting a massive job restructuring plan to boost profitability.
The Bank of England stepped up stimulus this month in anticipation of an economic contraction in the fourth quarter. Policy makers said that the outlook is particularly uncertain because of Covid and the U.K.’s departure from the European Union’s single market on Jan. 1.
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