June 29, 2022

Britain’s retail sales rose in October over auction houses and shoppers seeking new clothes for the Christmas holidays.

According to the Office for National Statistics, retail sales volumes rose by 0.8% month-on-month in October. The country’s retail sales are above the level of February 2020 at 5.8%, before the COVID-19 pandemic.

In October, auction houses were an especially strong driver of retail sales growth. A picture by British artist Banksy fetched 18.6 million pounds ($25.1 million) when it went back under auction in the same room in London.

According to reports, in a separate data it was shown that the government had borrowed more than expected in the reporting month. The country’s borrowing for the year currently is more than 100 billion pounds below its level compared to April-October 2020, when the economy felt the full force of the pandemic.

Chief UK economist at consultancy Capital Economics, Paul Dales commented that the rebound in retail sales in October and the further improvement in the public finances will add to expectations that the Bank of England will raise interest rates from 0.10% to 0.25% in December.

The Bank of England, with inflation surging mentioned that it will raise rates in the coming months if evidence shows the country’s economy has not been impaired by the end of the COVID-19 job-protecting furlough scheme, which had closed last month.

According to reports, in November, the current retail sales data and an improvement in the GfK measure of consumer confidence after slower-than-expected growth in the third quarter suggested the economy has not worsened so far.

According to the ONS data, clothes sales rose by 6.2% last month, helped by an early Christmas trading boost to sales. While sports, games and toy stores also had a good month.

Another data showed the country’s public borrowing was higher than expected last month at 18.8 billion pounds, 200 million pounds lower than a year earlier.

The country’s monthly debt interest payments were recorded to triple their level a year earlier at 5.6 billion pounds, thus reflecting higher payments on index-linked bonds due to a surge in inflation.