LONDON (AFP) - British retail sales fell in October for the first time for three months, official figures showed, raising worries about a subdued start to the crucial Christmas trading period.
The office of National Statistics said retail sales fell by 0.4 percent by volume last month from September, double expectations of a 0.2 percent drop.
However, on a year-on-year basis, retail sales were up 6.0 percent, in line with expectations. In September, retail sales had grown by 7.0 percent from the same period of the previous year.
The statistics office also revised upwards slightly its estimate for September's monthly rise to 1.1 percent from 1.0 percent previously.
The October fall was "no disaster by any means," said HSBC economist John Butler.
"However, it suggests that the crucial Christmas trading period for retailers has begun subdued," he added.
There were decreases across all sectors except textiles, clothing and footwear.
The statistics office said that in the three months to October, retail sales rose 1.2 percent from the previous three months, suggesting the underlying trend remains one of weakening sales growth, it added.
"Underlying retail sales growth has remained at a rate that is distinctly lower than that shown throughout the first half of 2004."
The figures hint that consumer appetite has been dampened by higher borrowing costs and are likely to cement expectations that the Bank of England may not raise interest rates again in this cycle from the current base rate of 4.75 percent.
The rate-setting Monetary Policy Committee has lifted its key repo rate by a quarter point on five occasions over the last year, in an attempt to rein in inflationary pressures stemming primarily from rampant consumer spending.
11/18/2004 - 12:05 GMT - AFP