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Oct. 19, 2017, 4:41 a.m. EDT

U.K. retail sales disappoint with drop of 0.8%

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By Wiktor Szary

LONDON--U.K. retail sales fell on the month in September, reversing the previous month's gains and pointing to a continued living standards squeeze British households have faced since the Brexit vote last year.

The Office for National Statistics said Thursday that retail sales fell by a monthly 0.8% last month, practically wiping off August's 0.9% growth.

Economists polled by The Wall Street Journal predicted no change in the volume of sales between the two months.

The decline was driven largely by a fall in sales of non-essential items, such as spectacles, souvenirs, weapons and collectables.

Overall, this means that retail sales have grown by merely 1.2% on the year in the third quarter, the slowest rate of annual expansion in over four years, a worrying sign for the largely domestic-driven U.K. economy.

Retail sales are expected to make almost no contribution to quarterly economic growth in the July-September period, government statisticians said.

The U.K. economy slowed visibly this year, as consumers came under pressure from accelerating inflation, spurred by the pound's collapse in the wake of the Brexit referendum last year.

Consumer price growth stood at 3% in September, the fastest pace of inflation in over five and a half years.

Write to Wiktor Szary at Wiktor.Szary@wsj.com and Jason Douglas at Jason.Douglas@wsj.com

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