Oct. 27 (Bloomberg) -- U.K. retail sales fell in October for a fifth month as hardware and footwear purchases faltered, the Confederation of British Industry said.
The gauge of annual sales growth was at minus 11 compared with minus 15 in September, which was the lowest since May 2010, the London-based business lobby said in a report today. A gauge of expected sales for next month showed an increase to 4, which the CBI said points to modest growth.
U.K. households are under pressure from the biggest public spending squeeze since World War II and inflation that’s accelerated to 5.2 percent, the highest in three years. The Bank of England expanded stimulus this month and Markets Director Paul Fisher said the decision was justified by the risk the economy may already be shrinking.
“Family budgets continue to be stretched because of a combination of high inflation, low wage growth and soaring unemployment, so consumer confidence is severely dented,” Ian McCafferty, chief economic adviser at the CBI, said in a statement. “Consumers will continue to be on the back foot.”
A measure of three-month sales volumes fell to minus 13 this month, the lowest since August 2009, from minus 11, the CBI said. An index of the volume of sales for the time of year fell to minus 34, the weakest since May 2009, from minus 30.
A gauge of orders placed on suppliers rose to 1 from minus 16, while an index of stock volumes in relation to expected demand fell 1 point to 15.
Asos Plc, the U.K.’s second-largest online clothing retailer, said Oct. 14 that U.K. sales growth in the fiscal second quarter slowed as weakening consumer sentiment restrained shoppers. Kingfisher Plc Chief Executive Officer Ian Cheshire said this month that the market is “more uncertain than it’s ever been.” A Nationwide Building Society index of consumer confidence fell 3 points in September to 45.
The Bank of England raised its bond-purchase program by 75 billion pounds ($120 billion) to 275 billion pounds this month and kept the key interest rate at a record-low 0.5 percent.
“There was sufficient downward momentum in the U.K. economy to justify 75 billion,” Fisher said in an interview published today.
The CBI report is based on a survey of 78 retailers between Sept. 28 and Oct. 19.
--Editors: Fergal O’Brien, Eddie Buckle
To contact the reporter on this story: Scott Hamilton in London at email@example.com
To contact the editor responsible for this story: Matthew Brockett at firstname.lastname@example.org