21
May
UK retail sales beat expectations
UK retail sales increased much more than expected in April, as
lower interest rates appear to be helping maintain consumer
spending.
Despite the continuing recession, sales rose 0.9% last month
from March, said the Office for National Statistics. Analysts had
only expected a 0.5% rise.
UK interest rates were cut to 0.5% in March, which has meant
lower monthly bills for many mortgage holders.
The British Retail Consortium had already said sales rose in
April.
Compared with April last year, sales last month were up 2.6%,
added the Office for National Statistics (ONS).
However some analysts warned that retail sales could fall back
as 2009 continues due to rising unemployment.
'Confirming trend'
While analysts generally welcomed the rises, some expressed
scepticism as the figures for April are the first since the ONS
changed its survey methodology following criticism that previous
figures did not tally with those of other retail spending
studies.
The retail sales figures confirm the trend which came through
from the British Retail Consortium report a few days ago," said
Stephen Lewis, chief economist at Insinger de Beaufort.
"They [retail figures] are always a surprise, and even with the
new method they seem to be throwing up figures which many people
feel may be on the firm side of what they would expect."
The ONS said clothing and footwear sales were particularly
strong last month, while department stores enjoyed their best
year-on-year performance since February of last year.
However, it added that the overall picture remained "mixed",
with sales of household goods falling.
Sales of textiles, clothing and footwear were up 11.9% in April,
while the increase at food stores was 0.5%.
Household goods sales were down 8%.
'Spending bounce'
Vicky Redwood of Capital Economics said the rise in April sales
confirmed that "the High Street has enjoyed a decent bounce in
spending lately".
"It's therefore looking increasingly likely that there has been
a more fundamental improvement in sales, perhaps related to the
pick-up in disposable incomes caused by falling inflation and
interest rates," she said.
"But we remain doubtful that this is the start of a sharp or
sustained consumer recovery."
She warned that rising unemployment would likely act to drag
down future spending.
www.bbc.co.uk/news
Thursday 21st May 2009