The rate of growth in retail sales in the UK in April was far higher than what analysts had anticipated. In addition to this, it experienced the largest growth over a period of three months since the middle of 2021. As evidenced by the report, consumer expenditure is holding up well despite growing prices.
Retail sales rose by 0.5% in April, following a 1.2% drop in March. The prior dip was brought on by stormy weather, which encouraged customers to spend more time indoors. As a result, sales dropped. The data exceeded expectations, as the general consensus projection called for a rise in retail sales of 0.3% from the previous month to the current one.
The increase in retail sales over a period of three months was 0.8% during the period spanning February to April, making it the highest gain of its kind in the three months leading up to August 2021.
In spite of this, year-over-year retail sales were just 3.0% lower than they were the previous year, which exceeded forecasts. Additionally, it reported a decrease in food sales of 2.7% year over year. Even while the drop in food sales was not as severe as it had been in the preceding months, this pattern is reflective of the effect the rising cost of living is having on household expenditure.
"Retail sales grew, partially rebounding from a poor weather affected March, with jewellers, sports retailers, and department stores all having a good month. Despite continued high food prices, supermarkets also recovered from the fall in March," said Grant Fitzner, chief economist at the Office for National Statistics.
The sharp increase in inflation experienced in the UK has a negative impact on consumers' ability to spend. The rate of price inflation fell to 8.7% in April from 10.1% in March, as indicated by numbers that were published earlier this week. This drop was much less severe than everybody had expected it would be.
Andrew Bailey, the governor of the Bank of England, had expressed concern that inflation could become "sticky and stubborn" in the months to come two days earlier. As a consequence of this, the Federal Reserve may be compelled to hike interest rates even more in order to maintain price stability. Keeping inflation under control is essential to the Fed's mission.
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