Pound climbs as official data shows unexpected 2.2% annual rise in sales volumes in September, against a 1.1% increase in wages.
British retail sales rose faster than expected in September, supporting hopes that the economy recorded strong third-quarter growth.
Retail sales volumes rose 0.6% on August to show annual growth of 2.2%, the Office for National Statistics said on Thursday. Economists had expected a rise of 0.4% on the month and 2.1pc on the year.
The encouraging data, which was boosted by an increase in furniture sales as the housing market recovered, sent the pound rising following the announcement. Sterling rose from under $1.60 to $1.609 after the figures were made public.
The 2.2% annual rise was double wage growth of 1.1pc, and is likely to lead to fears that the current rate of economic recovery is unsustainable – although comparisons are skewed since the retail data cover sales volumes rather than spending.
Food sales, meanwhile, fell for a second consecutive month.
Keith Richardson, retail sector head at Lloyds Commercial Banking, said the figures “chart returning confidence amongst consumers and a renewed willingness to spend”.
“After a more challenging August, these figures provide a boost ahead of the vital festive period, which most retailers expect to be the strongest in terms of sales since before the start of the financial crisis,” he said.
“In preparation for the run-up to Christmas retailers are focusing on the breadth and quality of their ranges to support shoppers that are willing to spend but continue to be highly selective in their purchases.”