Retail sales fell in October as official figures showed that shoppers kept a tight rein on spending amid growing Brexit uncertainty.
Sales volumes dropped by 0.5% from September, in contrast to forecasts in a Reuters poll of economists for a rise of 0.2%.
The decline adds to the gloom on the high street after Debenhams posted another poor set of figures this week. Many big retailers have announced shop closures and redundancies in recent months, including House of Fraser, Evans Cycles and Poundworld.
The Office for National Statistics (ONS) said annual growth slowed to 2.2% from an upwardly revised 3.3% in September, as shoppers held off winter clothing purchases due to mild weather and cut back on other goods after a heavy-spending summer.
In the three months to October, which smooths out some monthly volatility, sales growth slowed to 0.4% from 1.2%, the weakest growth since April. Rising prices at fuel garages have also pushed petrol and diesel sales to their weakest year-on-year growth since March 2017.
Samuel Tombs, the chief UK economist at the consultancy Pantheon Macroeconomics, said: “October’s fall in retail sales is the first real sign that consumers are tightening their purse strings due to uncertainty about Brexit,” he said.
The decline was led by a 1.3% fall in non-food sales, which the ONS blamed on a reluctance by shoppers to spend on homeware. Household goods sales fell by 3%; clothing sales dropped by 1%. The government’s statistics agency said the long-run trend for strong growth on the internet and falls on the high street was maintained.
Philipp Gutzwiller, head of commercial banking for retailers at Lloyds Bank, said retailers were hoping for the recent rise in wages to feed into higher spending. This week, the ONS said total pay, including bonuses, was growing at an annual rate of 3% in the three months ending in September – the fastest growth rate in three years.
“All retailers will be hoping that consumers soon show signs of not only feeling they have a bit more to spend this year, thanks to rising real wages and record employment, but more importantly that they have the confidence to spend it,” Gutzwiller said.
Britain’s economy has slowed since June 2016’s Brexit vote but had a solid summer, with household spending growing by 0.5% in the three months to September.