Retail sales show marginal increase in September

Retail sales show marginal increase in September

	Published : Fri, 21 Oct 2005 09:05 By : Andrew Stead Print this Story

LONDON: September witnessed an increase in retail sales on the high streets, setting at rest the fears of a slowdown and at the same time reducing chances of a further cut in the interest rates. Britain's Office for National Statistics (ONS) revealed that there has been an increase of 0.7 per cent in sales in September compared with a predicted 0.3 per cent.

Analysts are now very clear the Bank of England will not even bother to examine the need for any rate cut. Corroborating this view, the minutes of the monetary policy committee's last meeting indicated that the committee did not even discuss the issue at its last meeting.

The ONS also revised the August's sales figures to growth of 0.2 per cent from the flat reading reported last month.

The ONS data indicated that alongside the higher sales volumes were the lower prices prevailing in the market. On an average, prices are lower by 0.9 per cent on the year and the value of sales is lower compared with last year.

The ONS said the increase in retail sales is highest in food stores, where spending increased by 1.4 per cent over the month, which even offset the 1.1 per cent fall in August. Improvements were recorded in textiles, clothing and footwear and household goods stores.

However, in the third quarter as a whole, sales volumes increased by 0.4 per cent and year-on-year retail sales growth slowed to just 0.7 per cent - the lowest since January 1996.

In another set of figures released showed that mortgage lending had its highest monthly increase in nine months in September, reinforcing analysts' views that the August rate cut had indeed helped the housing market to stabilise. The Council of Mortgage Lenders (CML) said gross mortgage lending increased by 4.3 per cent to 28.1 billion pounds in September from 26.9 billion pounds in August. CML's director-general Michael Coogan, said the rise indicated that the housing market is in relatively good health and that consumers appeared to be confident to take mortgage borrowing.