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UK sales figures disappoint again

UK sales data - May add to recovery worries
UK sales data - May add to recovery worries

Official figures show that British retail sales failed to grow for a second month running in September, despite economists' expectations for a 0.5% rise.

The Office for National Statistics said sales volumes were flat on the month, leaving them 2.4% higher than a year ago.

Debenhams profit near top of forecasts

The figures suggest consumers remain reluctant to spend at a time when unemployment is rising and may reinforce worries over the strength of any economic recovery.

Figures on Friday are expected to show Britain's economy grew in the third quarter after more than a year of decline, though some recent data has cast doubt on that.

Today's sales figures showed that textile, clothing and footwear sales volumes fell 0.5% on the month while sales of non-specialised stores, which includes department stores, were up by 0.5%. Sales of household goods rose 0.3%.

The retail sales deflator fell to -0.5% in September compared with a year ago. That was the fourth consecutive month it has been negative, indicating retailers are still having to cut prices to lure in shoppers.

Separately, the Bank of England said the flow of lending to British businesses improved sharply in August but still remained negative, with major banks reporting a rise in spreads and fees on new lending.