UK retail sales slump in October, undershooting forecasts and denting growth hopes

UK retail sales fell 1.1% m/m in October after a +0.7% gain in September (revised from +0.5%), the ONS said Friday, badly missing the market call for 0.0%. Ex-fuel core sales dropped 1.0% m/m (consensus -0.2%) following a revised +0.7% in September.

On an annual basis, headline sales growth slowed to +0.2% y/y (prior +1.0%, revised from +1.5%) versus expectations of +1.5%. Core sales rose +1.2% y/y, down from +1.7% (revised from +2.3%) and below the +2.5% consensus.

Why it matters

• Consumer softness: The broad miss across headline and core suggests discretionary demand remains fragile heading into Q4 amid higher living costs and uncertainty around November’s Budget.
• BoE implications: With activity cooling and CPI easing, the print nudges the Bank of England closer to a December rate cut case—though policymakers will weigh this against still-elevated core inflation and wage dynamics.
• Market takeaways: Typically GBP and gilts yields bias lower on growth disappointments; UK retail-exposed equities may underperform relative to defensives.

Bottom line: A broad-based October setback leaves UK consumption on a weaker footing, keeping the growth outlook subdued and policy risks skewed toward near-term easing if incoming labor and inflation data don’t re-accelerate.