LONDON (Reuters) - Retail sales growth slowed to its weakest pace in nearly a year in October, a survey showed on Tuesday, suggesting that fragile consumer confidence and higher interest rates are biting in the run up to Christmas.
The British Retail Consortium said like-for-like sales grew just 1.0 percent on the year in October, down from 3.0 percent in September and the slowest since November last year.
Total sales — which includes new floorspace — grew 3.0 percent on the year, down from a 4.9 percent rate in September.
The figures are likely to boost speculation that interest rates will have to come down from 5.75 percent sooner rather than later as the economy shows signs of softening, although a rate cut this week is still seen as an outside bet.
The Bank is expected to hold rates steady at 5.75 percent on Thursday.
“This result reflects the downward trend in sales growth that we have been anticipating as a consequence of higher mortgage interest rates and other pressures on household incomes,” said Kevin Hawkins, BRC Director General.
“It points to some challenging trading conditions for many retailers.”
The BRC said the three-month like-for-like sales trend rate fell to 2.0 percent in October from 2.1 percent in September and to 3.9 percent from 4.0 percent for total sales.
Reporting by Matt Falloon