UK retail sales grew at the fastest pace in one-and-a-half years in April, after heavy snow dampened spending at the start of the year.
Retail sales volume, including auto fuel, expanded 1.6 percent month-on-month, in contrast to a 1.1 percent fall in March, figures from the Office for National Statistics showed Thursday. Sales were forecast to climb moderately by 0.9 percent.
Excluding auto fuel, retail sales volume increased 1.3 percent, reversing a 0.5 percent drop in March. Economists had expected a 0.5 percent rise.
Food store sales advanced 1.4 percent and non-food store sales gained 1.5 percent in April.
Rob Kent-Smith, head of National Accounts, said, “Retail sales bounced back in April, as petrol and other sales recovered from the snowfall. But the underlying position remains subdued with the volume of goods sold over the last six months broadly unchanged.”
Over the longer-term, retail sales growth has slowed considerably, with increases in food, household goods and internet retailers being largely offset by declines across all other types of retailing, Kent-Smith added.
On a yearly basis, retail sales including auto fuel, rose 1.4 percent in April after expanding 1.3 percent in March. Excluding auto fuel, sales volume advanced 1.5 percent versus 1.3 percent rise a month ago.
James Smith, an ING economist said, the fragile retail sector is the biggest risk to a summer Bank of England rate hike.
Admittedly, with wage growth showing some signs of life over recent months, the economist interpreted from recent BoE communication that policymakers would like to hike again in August if the data allows them to.
According to a survey from the Confederation of British Industry, retailers reported a moderate growth in sales in May, but they expect sales to fall next month.