UK retail sales rebound but outlook gloomy: data
LONDON
British retail sales unexpectedly rebounded in April, data showed on May 20, but remain on a long-term downward trend amid a cost-of-living crisis that saw inflation rocket to a 40-year high.
Total sales volumes jumped 1.4 percent last month after a 1.2-percent drop in March, the Office for National Statistics (ONS) said in a statement.
However, sales fell 0.3 percent in the three months to April compared to the previous three months, extending a downward trend in place since the summer of 2021.
“Retail sales picked up in April after last month’s fall,” said Heather Bovill, ONS deputy director for surveys and economic indicators.
“However, these figures still show a continued longer-term downward trend.”
“April’s rise was driven by an increase in supermarket sales, led by alcohol and tobacco and sweet treats, with off-licences also reporting a boost, possibly due to people staying in more to save money.”
Inflation rocketed in April to 9 percent, the highest since 1982, driven largely by soaring domestic energy prices.
The squeeze on U.K. household budgets tightened further in April after a British tax hike as the government looks to improve state coffers battered by COVID support.
“The unexpectedly strong rise in retail sales in April suggests that the cost of living crisis has not caused consumer spending to collapse and means that the economy may have a little more momentum than we thought,” noted Capital Economics analyst Nicholas Farr.
Pantheon Macroeconomics analyst Samuel Tombs cautioned that the worst was perhaps yet to come.
“The impact of April’s increase in both (taxation) and energy bills hasn’t fully emerged in the retail sales data yet, because most people only get paid towards the end of the month, and bills will be paid progressively through the month,” noted Tombs.
