By Wiktor Szary
LONDON--U.K. retail sales rose strongly in October, a trade group survey showed, adding to evidence consumer spending remained robust in the wake of Britain's vote to leave the European Union.
The British Retail Consortium said that like-for-like sales, which strip out any changes in the number of retailers and floor space, rose 1.7% on the year in the four-week period from Oct. 2 to Oct. 29. Total sales rose 2.4% compared with the same period last year, the strongest annual growth since January, the BRC said.
The figures, published Tuesday in the U.K., appear to be in line with data released previously by the Confederation of British Industry, a lobby group, which showed that retail sales were significantly stronger than expected last month. Together, the figures suggest that consumer spending--one of the U.K. economy's key engines of growth--remained resilient as retailers entered the fourth quarter. This, however, won't be confirmed until official data is published later this month.
Official figures for September showed that sales held up well following a strong summer, helping the economy to weather the post-Brexit vote storm. Preliminary data showed last month that the U.K.'s economic output grew by a higher-than-expected 0.5% on the quarter in the three months since the June referendum.
However, some economists warn that accelerating inflation combined with limited wage growth may curb Britons' willingness to part with their cash in the months ahead, hurting the U.K.'s growth prospects. Consumer prices grew at 1.0% on the year in September, the fastest pace in nearly two years. Following the pound's plunge since the June 23 referendum, inflation will likely speed up further, economists say.
For now, this appears to be manageable, the BRC said.
"It is clear from [Tuesday's] figures that despite the inflationary pressure that's gradually building in the supply chain, retailers are currently effectively managing the additional cost burdens and continue to entice their customers," said Helen Dickson, the BRC's chief executive.
But luring Britons into shops may become trickier in the near future, some data suggest. A long-running barometer of consumer confidence, conducted by market researcher GfK U.K. Ltd., showed U.K. consumer confidence fell in October as Britons grew more anxious about the country's economic prospects over the coming months.
Write to Wiktor Szary at Wiktor.Szary@wsj.com
(END) Dow Jones Newswires
November 07, 2016 19:15 ET (00:15 GMT)
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