This is another sign that the country’s overall economy is on track for solid growth in the third quarter of 2018. Retail sales jumped by 3.3% as compared with August last year, stronger than all forecasts in a Reuters poll of economists.
This was slightly slower than an upwardly revised 3.8% leap in July. That jump was widely seen as a response to the soccer world cup and soaring summer temperatures.
In monthly terms, sales rose by 0.3% in August from July, said the Office for National Statistics. This defied the median forecast in the Reuters poll for a fall of 0.2%. Looking at three months to August as a whole, growth in sales slowed down to 2%, down from 2.4% in July—smoothening out some volatility.
This spending by Britain’s consumers helps lessen the hit to the overall economy from the 2016 Brexit vote—despite their purchasing power being squeezed by high inflation and growth being slow in wages.
Figures published on Wednesday showed inflation jumping to a six-month high of 2.7% in the 12 months to August. Last week, surveys from the British Retail Consortium and Barclaycard suggested consumers had shifted some of their spending in August away from shops to pubs– which saw an increase in takings.
High street retailers have had to resort to steep discounts , however.
The ONS said sales in August were boosted by shops offering promotions on household goods such as furniture and electrical appliances while food sales and clothing fell compared with July.
Britain’s biggest retailer Tesco launched a new grocery store brand on Wednesday to compete with fast-growing German discounters Aldi and Lidl on price.
Clothing retail French Connection stated on Thursday it expected to close eight more stores in 2018 and that it had reviewed lease contracts of other loss-making stores– citing the deterioration of trading conditions on the high street.
The sector is grappling with the shift to online spending. Thursday’s figures showed online spending accounted for a record 18.2% of all August retailing.