Decline In U.K. Retail Sales Exceeds Forecast

Decline In U.K. Retail Sales Exceeds Forecast




U.K. retail sales slipped more than expected in February, reflecting the fragile state of the economy, leaving little hopes for support to the recovery from consumer spending.
Retail sales volume including automotive fuel fell 0.8 percent in February from a month ago, marking the biggest decline since May 2011. The decline reversed a downwardly revised 0.3 percent rise in January and came in larger than the expected drop of 0.5 percent.
Citing the late arrival of data from smaller stores, the statistical office downgraded January's growth from 0.9 percent.
The data puts a real dent in hopes that the consumer may be perking up appreciably and tempers hopes that GDP will see a relatively decent return to growth in the first quarter, IHS Global Insight Chief U.K. economist Howard Archer said.
Predominantly food stores sales dropped 0.1 percent and non-food store sales slipped 1.5 percent. Textile, clothing and footwear sales decreased 1.2 percent and non-store retailing sales were down 0.4 percent.
Sales excluding auto fuel also declined by 0.8 percent month-on-month. The decline follows 0.6 percent growth each in January and December.
The implied deflator climbed 2.4 percent, slower than the 2.2 percent increase in January. Excluding auto fuel, the deflator gained 1.9 percent. Consumer price inflation had eased to a 15-month low of 3.4 percent in February.
All retailing including automotive fuel increased 1 percent annually in February, slower than the 1.4 percent rise logged in January. The actual rate of growth was weaker than the expected 2.4 percent rise.
Likewise, sales excluding auto fuel grew 1 percent, slower than the consensus forecast of 2.3 percent and also below last month's 1.1 percent increase.
Yesterday, Chancellor George Osborne said the U.K. economy is likely to avoid a technical recession. The Office for Budget Responsibility revised up its growth forecast for this year to 0.8 percent.


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