Connect with us

Business

UK retail sales stagnant in March despite early Easter boost

blogaid.org

Published

on

Food inflation cooled slightly in May as lower energy and commodity costs finally showed signs of filtering down to consumers.

Despite hopes for a revival in consumer spending fueled by the early Easter holidays, retail sales in Britain unexpectedly stagnated in March, painting a mixed picture of the country’s economic recovery.

Official data from the Office for National Statistics showed retail sales held steady last month, exceeding analyst expectations of a modest increase.

The lackluster retail sales performance came as a surprise to many, especially after positive surveys suggested consumer spending was trending positively in March. While some sectors, including gasoline and clothing, reported modest gains, overall spending failed to gain momentum, dampening hopes for a robust retail recovery.

Heather Bovill, a senior statistician at the ONS, highlighted the contrasting trends within the retail sector, noting that while DIY stores and furniture stores saw a rise in sales, others such as department stores and food stores saw a decline. The mixed performance underlines the complex dynamics influencing consumer behavior amid ongoing economic uncertainties.

While quarterly data showed a marginal increase in retail sales over the past three months, which was mainly attributed to a post-Christmas recovery, economists remain cautious about the outlook for consumer spending. While falling inflation and rising wages have brought some relief to household finances, concerns remain about the potential impact of higher borrowing costs on consumer confidence.

Despite signs of economic recovery, fueled by an improvement in real incomes and GDP growth in the first quarter, analysts remain wary of the wider implications of the Bank of England’s monetary policy decisions. With a single rate cut expected later this year, investors are closely watching the central bank’s response to changing economic conditions and their potential impact on household finances and consumer spending.

The latest retail sales figures underline the delicate balance between economic growth and consumer confidence and highlight the challenges policymakers and businesses face in navigating the uncertain path to recovery amid persistent inflationary pressures and interest rate uncertainties.