UK retail sales grew solidly in August, beating expectations and providing a boost for the pound.
Sales climbed by 1% compared to July, well above the forecast of 0.2%, with non-food stores and non-store retailing being the main contributors of growth, according to the Office of National Statistics.
The news comes despite price rises across all store types on the year, with non-food stores recording their highest year-on-year price growth since March 1992, at 3.2%.
The pound jumped 0.7% against the dollar to $1.3580 after the report was released.
Commenting on the official retail figures, Kate Davies, ONS senior statistician said: “Within this month’s retail sales we are seeing strong price increases across all store types compared with a year ago, reflecting wider inflationary pressures. However, we are still seeing underlying growth in sales volumes, and with strong growth in non-essential purchases as consumers continued to buy more from non-food stores.”
Rachel Lund, head of Retail Insight & Analytics at the British Retail Consortium said August’s bout of Autumnal weather put a spring in the step of seasonal purchases as shoppers invested in winter wardrobes and furnishing home interiors.
But she issued a word of caution: “Retail sales figures are notoriously volatile and with a number of factors making reliable seasonal adjustment nigh on impossible, the health of consumer spending should be assessed with caution,” she added.
“Pressures on consumers’ budgets remain and with lending at levels seen in the run-up to the last crisis, downside risks still remain. Moreover, a no-deal outcome in trade negotiations with the EU could leave consumers facing price increases of up to 30 per cent on some products, which will do substantial damage to growth in sales volumes.”