Rugby World Cup Boosts U.K. Retail Sales by Most Since 2013by
Food and drink sales up as games played across England
Retail-sales deflator now matches lowest in 27 years
U.K. retail sales rose the most in almost two years as Britons took advantage of promotions on beer and food for the Rugby World Cup that England is hosting.
The 1.9 percent surge in sales was the biggest increase since December 2013 and compared with economists’ forecast for a gain of 0.4 percent. From a year earlier, sales rose 6.5 percent, the Office for National Statistics said in London on Thursday.
England was knocked out of the tournament in the first round after losing to Wales and Australia. Even so, the economy has benefited. The ONS said retail sales advanced 0.9 percent in the third quarter, contributing 0.1 percent to growth. The report showed food and drink sales jumped 2.3 percent by volume in September. The food-price deflator was minus 2.1 percent, while the overall deflator was minus 3.6 percent, matching the lowest since records began in 1988.
Attendance at the Rugby World Cup 2015 tournament has already reached almost 2.2 million since it began on Sept. 18. The semi-finals, pitting South Africa against New Zealand and Argentina against Australia, take place on Saturday and Sunday, with the final the following weekend at Twickenham.
“Promotions around the Rugby World Cup are likely to be the main factors why the quantity bought in the retail sector increased in September,” said Kate Davies, head of retail sales statistics at the ONS.
Falling prices and improving wage growth are putting money in the pockets of consumers and helping them boost the economy. Retail sales have risen on an annual basis for 29 straight months, and Bank of England policy makers have highlighted the strength of the domestic economy even as an emerging-market slowdown threatens the global backdrop.
The pound jumped after the report and was up 0.3 percent at $1.5462 as of 10:42 a.m. London time.
“Acceleration in retail sales growth suggests U.K. domestic demand held up” in the third quarter, said Kallum Pickering, an economist at Berenberg Bank in London. Record levels of employment and growth in real wages are helping to provide “a timely boost to domestic demand while international risks continue to loom over the economy,” he said.
Clothing and footwear created a drag on sales in September compared with August, falling 0.9 percent on the month. Excluding auto fuel, sales gained 1.7 percent on the month and 5.9 percent on the year.