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U.K. Retail Sales Unexpectedly Fall as Brexit Fears Take Toll

U.K. Retail Sales Unexpectedly Fall as Brexit Fears Take Toll

(Bloomberg) --

U.K. retail sales unexpectedly fell in October, leaving growth over the last three months at its weakest for 1 1/2 years.

The volume of goods sold in stores and online fell 0.1% from September, the Office for National Statistics said Thursday. That compares with economists’ expectations for a 0.2% increase. Sales excluding auto fuel dropped 0.3%.

U.K. Retail Sales Unexpectedly Fall as Brexit Fears Take Toll

The figures show U.K. consumers entered the final quarter of the year on a downbeat note as uncertainty over Brexit intensifies. Sales between August and October grew just 0.2% -- the weakest pace since April 2018 -- with only food and clothing posting gains.

While consumer spending helped the U.K. avoid a recession before the U.K.’s now-delayed Oct. 31 departure from the European Union, signs of a turn in the labor market have raised questions as to how long their resilience can last. Uncertainty increased further in October as the government called an early election to end the Brexit impasse.

Last month alone, only department stores saw sales increases, driven by promotional events and the early introduction of Christmas lines. Food sales fell 0.2% while spending on household goods dropped 1.3%.

Total sales have now failed to grow in any of the past three months, the worst run since the period ending January 2017.

The figures will bring little optimism to U.K. retailers, who have been hit by a double whammy of political uncertainty and the rise on online shopping. The latest high-profile casualty of the high street’s troubles is baby-products retailer Mothercare Plc, whose U.K. operations collapsed into insolvency earlier this month.

While non-store sales fell in October, online spending accounted for 19.2% of all retailing, up slightly from the previous month.

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Andrew Atkinson

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