British retail sales fall for fifth month running, as consumer confidence slides – business live

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Retail sales across Great Britain have fallen again, in their longest losing streak in at least 25 years, in a sign that the UK economic rebound could be fading.

Retail sales volumes dropped by 0.2% in September 2021, driven by a fall in spending at non-food stores, although there was a jump in spending on fuel during last month’s panic buying.

That’s the fifth monthly decline in a row, after the initial burst of spending as shops reopened after the pandemic lockdown.

That, the Office for National Statistics says, is the longest run of monthly falls in a row since the survey began in 1996.

Economists had expected a 0.5% rise.

UK retail sales for September

UK retail sales fell in September, but at still 4.2% above the level seen before the pandemic Photograph: ONS

Spending fell most sharply at non-food stores, where sales volumes dropped by 1.4%.

That included a 9.3% fall at household goods stores, and a 14.8% tumble in furniture and lighting stores

Spending at food stores rose by 0.6% — and is 3.9% above pre-coronavirus pandemic levels.

Last month’s panic at the pumps lifted automotive fuel sales volumes by 2.9% in September 2021 — or 1.8% above their pre-pandemic February 2020 levels.

The ONS adds that consumes are still spending more online than before Covid-19.

The proportion of retail sales online rose to 28.1% in September 2021 from 27.9% in August, and “substantially higher” than the 19.7% in February 2020 before the pandemic.

Reuters’ Andy Bruce has spotted that the ONS have revised down their earlier retail sales figures too:

Andy Bruce

Interesting to note the @ONS has just revised down the level of retail sales for every month this year

(shown below are the revisions to index numbers for total retail sales volumes)

October 22, 2021

Also coming up today

New purchasing manager indices in the UK, France, Germany and the wider eurozone will show how manufacturing and services companies are faring this month.

Michael Hewson of CMC Markets says the PMIs could show a slowdown:

In the past few months, it has become increasingly apparent that we’ve seen peak PMI, when it comes to Germany and France, as well as the UK, although the slowdown has been more marked in Germany where we have seen a big fall from levels in the low 60’s to the mid to high 50’s. France manufacturing flash PMI is expected to come in at 53.9, and services 55.6.

In Germany September manufacturing activity fell to its lowest level since January, while services slipped to a three-month low, with both expected to weaken further to 56.5 and 55.2 respectively in October.

UK manufacturing and services activity has also seen moderate weakness in the past few months, but has shown some evidence of stabilisation, although rising power prices are now starting to become a headwind, not only in the UK but across the world. UK manufacturing is expected to slow to 56.1, and services to 54.5.

Yesterday, the CBI warned that British firms face the tightest supply chain squeeze since the 1970s

The agenda

  • 7am BST: UK retail sales for September
  • 9am BST: Eurozone ‘flash’ survey of purchasing managers this month
  • 9.30am BST: UK ‘flash’ survey of purchasing managers this month
  • 11.30am BST: Russia’s central bank sets interest rates
  • 2.45pm BTS: US ‘flash’ survey of purchasing managers this month


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