November 19, 2015 / 9:40 AM / 5 years ago

UK retail sales fall more than expected in October, food stores weigh

A woman carries shopping bags on Oxford Street in London, December 13, 2011. REUTERS/Finbarr O'Reilly

LONDON (Reuters) - British retail sales fell more than expected last month after surging in September, hurt by the biggest drop in food store sales since May 2014, official data showed on Thursday.

The Office for National Statistics said retail sales volumes fell 0.6 percent in the month of October after a 1.7 percent upturn in September, which was boosted by the Rugby World Cup.

Economists polled by Reuters had expected a 0.5 percent drop on the month.

The ONS said food stores, department stores and clothing were the biggest drags on retail sales growth in October.

While the decline was a little steeper than expected, British consumers remain upbeat, boosted by a pick-up in wages, falling prices for goods in stores and record-low interest rates that markets do not expect to rise until late next year, or even 2017.

Retail sales volumes rose 3.8 percent compared with a year ago, compared with a 6.2 percent annual rise in September, undershooting a Reuters poll forecast for 4.2 percent.

The ONS said the value of retail spending was up 0.5 percent on the year, compared with a 0.2 percent fall in spending recorded by the British Retail Consortium in October.

In the three months to October, retail sales volumes rose 0.9 percent, holding steady from September’s pace of growth that was the strongest since February.

The retail sales deflator, the measure of inflation which the ONS uses in retail data, fell 3.3 percent in October, compared with a 3.5 percent drop in September.

Reporting by Andy Bruce and Ana Nicolaci da Costa

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