(Bloomberg) -- U.K. consumers reined in their spending last month, with online sales bearing the brunt as summer discounts came to an end.
The volume of goods sold in stores and online slipped 0.2%, the Office for National Statistics said Thursday. That compares with economists' expectations for no change, and comes after increases in June and July. Sales excluding auto fuel fell 0.3%.
Consumers have been a strong point for the U.K. economy as Brexit uncertainty eats away at investment and business confidence. Record employment and rising real incomes are underpinning household spending, the largest part of the economy.
August's retail sales drop was led by a 3.2% drop in non-store retailing, the most in four years, as online sellers stopped promotions from earlier in the summer. Sales at department stores fell 1.3%, continuing their long-term slump after a rally in July.
Still, overall sales gained 0.6% in the three months through August from the previous period. The sector will add to third-quarter growth as long as it avoids a drop of at least 1.7% in September, the ONS said.
Nevertheless, it won't be easy for retailers this year as shoppers make fewer visits to brick-and-mortar stores and the crisis surrounding Britain's departure from the European Union reaches a climax. Next Plc, one of the most successful U.K. clothes sellers this year, reported a slow start to the autumn season on Thursday.
“Although we can see a way through the woods, we are not out the other side yet,” Next Chief Executive Officer Simon Wolfson said in a statement. “Consumer markets remain extremely volatile.”
The figures come just before the Bank of England is expected to keep the benchmark interest rate at 0.75%. The decision will be announced at noon in London.
To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net
To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, Andrew Atkinson
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