2017.10.2002:46:00UTC+00UK Retail Sales Plunge in September on Rising Inflation, Weak Pay Growth

Growing prices and squeezed household budgets caused a larger dent in UK retail sales in September, according to the Office for National Statistics data.

Official figures showed that the amount of goods purchased by consumers dropped 0.8 percent in September, following growth in July and August, and set the UK on track for a period of slow growth in the run-up to Christmas.

Sales volumes were up 1.5 percent in the third quarter of this year. This is the softest rate of annual increases since 2013, when sales finally started growing as consumers brushed off the after-effects of the 2008 financial crisis.

Supermarkets and food retailers, department stores and petrol stations were hardest hit. Clothes shops, by contrast, generated seven percent sales growth with their autumn collections.

According to analysts, there was a downward trend in retail sales after the rate of growth in the third quarter fell to its lowest since 2013.

Bank of England officials are seen to brush aside the weaker sales figures when they consider hiking interest rates at their next meeting on 2 November.

Since wages growth remains at 2.2 percent and the consumer prices index measure of inflation is at three percent, high street spending will likely continue to be stagnant for the rest of 2017.

Inflation reached its highest level for half a decade. The ONS also recently confirmed that store prices are facing their highest year-on-year growth since March 2012.