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bY Bloomberg

U.K. retail sales fell more than economists forecast in September as warm weather led shoppers to delay purchases of winter clothing.

The volume of sales including auto fuel fell 0.3 percent from August as clothing and footwear sales dropped 7.8 percent, the most since April 2012, the Office for National Statistics said in London today. Economists forecast a 0.1 percent decline, according to the median of 18 estimates in a Bloomberg News survey. Sales excluding fuel also declined 0.3 percent.

While employment has increased, weak wage growth is limiting households' spending power. As retailers compete for business, many are cutting prices, and today's report showed that shop prices fell by 1.4 percent in September from a year earlier, the most since July 2009. Tesco Plc Chief Executive Office Dave Lewis said today that trading conditions are "tough."

U.K. consumer confidence weakened last month and households' outlook for the economy also deteriorated, according to GfK NOP Ltd. Bank of England policy makers have also become more downbeat on the recovery, with some saying risks from the euro area have increased in the past month.

From a year earlier, retail sales rose 2.7 percent in September. They rose 0.3 percent in the third quarter from the second, the smallest increase since Sept.-Nov. 2013, when sales were flat. It was the weakest for a calendar quarter since the first three months of last year.

Food-store sales rose 0.6 percent in September from August. Non-food sales dropped 1.9 percent, with every sector besides "other stores," which includes pharmacies and computer shops, posting declines. Sales of auto fuel fell 0.3 percent.

While U.K. inflation has slowed to 1.2 percent, below the Bank of England's 2 percent target, it's still faster than wage growth.