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Retail sales fall sharply in November | Retail sales fall sharply in November |
(about 1 hour later) | |
Retail sales fell in November with shoppers keeping a tight grip on spending amid uncertainty about Brexit and ahead of December's election. | Retail sales fell in November with shoppers keeping a tight grip on spending amid uncertainty about Brexit and ahead of December's election. |
Monthly retail sales fell by 0.6% in November, the fourth month in a row without growth, the Office for National Statistics said. | Monthly retail sales fell by 0.6% in November, the fourth month in a row without growth, the Office for National Statistics said. |
"All main sectors saw their sales fall with the exception of food stores," ONS statistician Rhian Murphy said. | "All main sectors saw their sales fall with the exception of food stores," ONS statistician Rhian Murphy said. |
The data doesn't include Black Friday sales. | The data doesn't include Black Friday sales. |
Black Friday fell on 29 November this year, outside of the ONS reporting period for the month, which ended on 23 November. | Black Friday fell on 29 November this year, outside of the ONS reporting period for the month, which ended on 23 November. |
However the ONS said it had adjusted for where in the calendar Black Friday discounting fell when calculating its year-on-year analysis. | However the ONS said it had adjusted for where in the calendar Black Friday discounting fell when calculating its year-on-year analysis. |
That figure showed growth of 1% to November, the weakest annual growth since April 2018 and much lower than the 2.1% rate economists had predicted. | That figure showed growth of 1% to November, the weakest annual growth since April 2018 and much lower than the 2.1% rate economists had predicted. |
"At face value, November's further drop in retail sales is pretty concerning," said Thomas Pugh, UK economist at consultancy Capital Economics. | "At face value, November's further drop in retail sales is pretty concerning," said Thomas Pugh, UK economist at consultancy Capital Economics. |
Even if Black Friday ended up having a bigger effect than the ONS is calculating, he predicted this was "not a very merry Christmas for retailers". | Even if Black Friday ended up having a bigger effect than the ONS is calculating, he predicted this was "not a very merry Christmas for retailers". |
Tough year | |
Figures indicate that Black Friday this year was quite a bright spot in an otherwise gloomy retail environment. | |
Barclaycard, which processes nearly £1 of every £3 spent in the UK, said at the beginning of December that sales volumes from 25 November to 2 December were up 7.1% compared with 2018, while sales value rose by 16.5%. | |
But it has been a tough year for the retail industry in the UK, with a net 1,234 stores disappearing from Britain's top 500 High Streets in the first six months, according to accountants PwC. | |
Prime Minister Boris Johnson's sweeping election victory last week has all but eliminated the risk of a disruptive no-deal Brexit on 31 January, removing some of the uncertainty hanging over the UK economy. | Prime Minister Boris Johnson's sweeping election victory last week has all but eliminated the risk of a disruptive no-deal Brexit on 31 January, removing some of the uncertainty hanging over the UK economy. |
Some economists said that in the near term, Mr Johnson's election win should be good for consumer spending and the economy. | |
Duncan Brewer, a partner at consultancy firm Oliver Wyman, said "the general euphoria of a Conservative majority and a better exchange rate for the pound may lead to more spending over Christmas and in the New Year." | |
However, Mr Brewer added that this uplift for consumer spending "will likely only be short-lived". | |
"Despite more temporary political stability and low unemployment, we expect that at least two major well-loved British retailers will go bust over the course of next year, and that 100,000 jobs will be cut across the sector due to a combination of overall stagnated spending, cost-cutting and increased automation," he said. | |
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that inflation "is set to hover about 1.5% over the next nine months, while a revival in corporate confidence following the election should lead to stronger growth in employment." | |
"Disposable incomes also will be boosted by the recent sharp fall in mortgage rates and a big increase in the threshold for National Insurance contributions in April," Mr Tombs added. |