Published: Fri, May 19, 2017
Global Media | By Garry Long

British retail sales coming up roses

British retail sales coming up roses

Average weekly earnings excluding bonuses grew by a lower than expected 2.1% in the three months to March, the Office for National Statistics said - down from 2.2%.

"UK retail sales rose by 4.0% year on year in April, by 2.3% month on month, and in the three months to April they rose by 0.3% compared to the previous 3-month period".

It said: " Anecdotal evidence from retailers suggests that good weather contributed to growth".

The jump in retail sales in April pushed up retail sales over a broader three-month period by 0.3%, following a brief period of contraction.

That is because inflation picked up to 2.7pc in the 12 months to April, driven by the fall in the pound, which has pushed up the cost of imported goods.

The pound jumped on the news, rising 0.5% to over 1.30 USA dollars.

Retail sales were 2.3 percent and sales at supermarkets were up by 1.3 percent.

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The BOE, however, suppose that even without policy intervention, United Kingdom inflation will peak at 2.8 percent later this year, subsequently returning back to the target 2 percent thereafter.

A recovery in sterling's value - while still way below its pre-referendum level above $1.50 - could help limit the threat to households from inflation in the months ahead. And retail price rises continue to outstrip likely growth in wages. The prices data will dampen expectations of higher inflation.

Retail sales volume including auto fuel grew 2.3 percent month-on-month, reversing a 1.4 percent drop in March.

Analysts had expected April's reading to increase by just 1.0%.

A forecast earlier this week from the EY ITEM Club - which uses Treasury economic models - predicted that unemployment would rise to more than 5% next year as the UK's growth slowdown begins to bite.

Households have in part been financing their spending by saving less and borrowing more, taking advantage of record low interest rates.

"However, the retail environment is increasingly being challenged by inflation, which has risen to its highest level in five years and, at some point, retailers will have to ease the pressure by asking consumers to pay more for goods and services".

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