BCC: Surge in retail sales should boost economic growth

• Retail sales volumes in September 2015 are up 1.9% on the month and up 6.5% on the year.
• Average store prices fell by 3.6% in September 2015, compared with September 2014. 

Commenting on the retail sales figures for September 2015, David Kern, Chief Economist at the British Chambers of Commerce, said:

“Retail sales surged in September following several months of modest growth. For the whole of Q3 they were 5% higher than a year earlier; a rate of expansion much stronger than total GDP. Based on these figures it seems likely that the preliminary GDP figures due next week will show solid growth, in spite of the disappointing manufacturing and trade figures published recently.

“However, UK growth remains predicated on services and consumer spending. While the consumer sector is vital for the economy’s wellbeing, greater efforts are needed to rebalance growth towards exports and investment.

“At the same time deflationary forces in the retail sector are intensifying and prices continue to fall. Given that inflationary pressures in the UK economy are muted, despite rising earnings, the MPC can afford to hold off on increasing interest rates.”