U.K. retail sales recovered at a faster-than-expected pace on clothing demand in April, providing a notable support to economic growth at the start of second quarter.
The volume of retail sales including auto fuel expanded 1.2 percent month-on-month reversing a 0.7 percent fall in March, the Office for National Statistics reported Thursday. This was the fastest growth since November and exceeded a 0.4 percent rise forecast by economists.
Likewise, sales excluding auto fuel increased 1.2 percent after staying flat in March. Economists had forecast a 0.2 percent rise for April.
April’s jump in retail sales fuels belief that there is little risk of consumers delaying purchases in the expectation that prices will fall over the coming months – even though the UK experienced mild deflation in April, IHS Global Insight Chief UK Economist Howard Archer said.
April’s retail sales figures offer another reason to think that the economic recovery is not fizzling out, Paul Hollingsworth, a UK economist at Capital Economics, said.
With the fundamental drivers of spending looking good, Hollingsworth expects the consumer recovery to maintain a solid pace over the rest of the year.
Food store sales fell 0.1 percent from the prior month, while non-food store sales increased 2.4 percent. Clothing and footwear sales surged 5.2 percent, the most in four years.
The ONS said retailers suggested that the warmer than average weather in April led consumers to bring forward their purchase of summer clothes.
Including auto fuel, retail sales growth accelerated to 4.7 percent on a yearly basis in April from 4 percent in March and exceeded a 3.7 percent rise forecast by economists.
This was the twenty-fifth consecutive month of year-on-year growth and the longest period of sustained growth since May 2008.
Retail sales excluding auto fuel also grew 4.7 percent, but slightly slower than the 4.8 percent increase seen in March. Sales were expected to rise 3.7 percent.
The material has been provided by InstaForex Company – www.instaforex.com