LONDON, Dec 15 (Reuters) - Higher fuel prices took a chunk out of Britain’s rapid retail sales growth last month, official figures showed on Thursday, offering a warning about how rising inflation next year might hit consumer demand.
‘Black Friday’ discounts boosted sales of electronics, but the overall rate of growth slowed from October’s 14-year high.
Retail sales volumes, including fuel, were 5.9 percent higher than a year earlier in November, down from October’s 7.2 percent, which was the strongest since 2002. This decline was in line with economists’ forecasts in a Reuters poll.
Fuel sales dropped to their lowest in two years after the biggest price rise since 2011, the Office for National Statistics said.
British retail sales growth has been robust up to now, despite a sharp fall in sterling after Britain voted to leave the European Union in June. However, the Bank of England has warned the weaker currency will increasingly feed through into higher prices next year, contributing to slower economic growth.
Friday’s ONS data showed that the measure of inflation used in calculating retail sales turned positive for the first time since June 2014.
Earlier this week the broader measure of consumer price inflation rose to a more than two year high of 1.2 percent for November.
Excluding fuel sales, retail sales growth slowed slightly less than economists had predicted. Annual sales growth dropped to 6.6 percent from 7.5 percent.
“Department stores and household goods stores had a particularly strong month, especially in sales of electronic goods, boosted by Black Friday deals,” ONS statistician Kate Davies said.
Discounts on ‘Black Friday’, which fell on Nov. 25, the day after the U.S. Thanksgiving holiday, have only become common in Britain during the past few years, meaning seasonal adjustment methods do not fully strip them out of the data, the ONS said.
On the month, retail sales volumes were up just 0.2 percent compared with 1.8 percent growth in October. Clothing sales dropped by 1.4 percent, after strong growth the previous month when the weather became colder.
The ONS data broadly tally with the message from the British Retail Consortium last week, which said Black Friday led to spending being concentrated in the last week of November, and hurt retailers - such as clothing stores - which do not take part as much.
Sterling has dropped around 15 percent against the dollar since June 23, leading to price rises in goods ranging from laptop computers to popular branded foods. However many firms - for example, in the fashion sector - hedge against currency moves, so do not expect to raise prices until early next year.
Moreover, strong competition between supermarkets mean no major chain wants to be the first to jack up prices, even if industry data on Tuesday showed fewer price falls.