Tuesday, November 9, 1999 Published at 11:31 GMT
Business: The Economy
Shop sales pick up
DIY sales were strong as the housing boom fed into the high street
High street sales picked up slightly in October, as shoppers were tempted by pre-Christmas sales and discounts.
Retail sales rose 1.7% last month compared to the previous October, the British Retail Consortium (BRC) said.
The BRC warned that the figures were flattered by poor sales in October last year, the low point of 1998.
"This was a dull month for retailers, with very little improvement on previous months. The concerns about a boom which are exercising policymakers are not reflected in the retail sales picture," the BRC's economic advisor Bridget Rosewell said.
If new store space is included, sales rose by 4.7% on the year.
Last week's decision by the Bank of England to raise interest rates by 0.25% to 5.5% prompted retail concerns of subdued Christmas sales.
"There remains no prospect of price inflation from the high street and the recent hike in interest rates was unnessecary," Andrew Higginson, chairman of the BRC's economic affairs committee and finance chief at supermarket group Tesco, said.
Some evidence exists that the housing boom - which prompted the rate increase - is feeding into the high street. While growth in food sales was lower than last year, DIY, furniture and home accessories all saw strong growth.
Evidence of a pick up in retail sales has been mixed in recent months.
Last week, a survey released by the Confederation of British Industry found that high street sales failed to meet expectations in October, but that the long-term trend remains robust.
While government statistics found that retail sales rose less than expected in September, it said that after a strong summer, the trend was still positive.
Consumer confidence surveys, meanwhile, show that economic confidence among shoppers is increasing.
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