Retail sales up ahead of VAT rise

Retail sales up ahead of VAT rise


Retail sales volumes picked up in October amid signs that shoppers brought forward purchases ahead of January’s rise in VAT to 20%.

The 0.5% increase announced by the Office for National Statistics (ONS) represented a turnaround from two months of sales declines, although the performance was still 0.1% lower than the same month a year earlier.

The growth in sales volumes was driven by non-food stores, including demand in textile, clothing and footwear shops.

Howard Archer, chief European economist at IHS Insight, described the sales growth as “decent but unspectacular”.

He added: “It is likely that retail sales will benefit to a limited extent in the final weeks of this year from consumers looking to make purchases of more expensive items ahead of the January VAT increase from 17.5% to 20%.

“Retailers will also be fervently hoping that consumers decide to splash out and have a good Christmas despite their worries and uncertainties over the economic outlook.”



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