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UK retail sales struggled to recover in September, recording no growth month on month following a 0.1 per cent drop in August.

Official data published on Thursday were worse than expected – economists had forecast sales excluding petrol to grow 0.2 per cent month on month and 4.4 per cent versus September 2015. In reality, the year-on-year number came in at 4 per cent following a 6.2 per cent jump in August.

Including fuel, sales were also flat in September compared to August, when they also failed to grow, although this was a slight improvement on a previous estimate of a 0.2 per cent drop that month. Year on year, total retail sales including fuel rose 4.1 per cent in September although again this underwhelmed – economists had been expecting growth of 4.7 per cent.

The Office for National Statistics said increases in sales at department stores and household goods retailers last month were offset by falling sales at supermarkets and clothing outlets. Clothing sales suffered in part due to rising prices and a warmer than average September, the ONS said.

But it added that the underlying pattern was “relatively strong” with sales in the three months to September rising 1.8 per cent compared to the previous three months.

So far consumer sentiment has been pretty resilient since Britain’s vote to leave the EU although whether that will continue to last, as inflation rises and the government triggers formal negotiations with the bloc by the end of March next year, is the subject of debate.

UK retailers have faced a rise in the cost of products they import from abroad since the June 23 referendum as the value of the pound has slumped. Ratings agency Standard & Poor’s recently warned that profit margins at UK retailers are likely to be “subdued” this year and next, as they face rising import costs and are under pressure to keep costs low for domestic shoppers.

The fall in the pound has also pushed up inflation, which could start to factor into consumers’ spending decisions. A household finance index, produced yesterday by IHS Markit, suggested UK households saw a “noticeable” downturn in their finances last month, predominantly due to rising inflation, while wage growth was negligible. Inflation jumped to 1 per cent in September, the highest level in nearly two years.

Nevertheless IHS Markit economist Howard Archer expects third quarter GDP growth in the UK to have been helped by relatively robust consumer sentiment since the Brexit vote. He is forecasting 0.4 per cent GDP growth between July and September.

The ONS will publish its first estimate of third quarter GDP on October 27.

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