British retail sales surged in April as consumers took advantage of falling prices and unusually warm weather to buy new clothes.
Thursday’s strong official data suggest a slowdown in the economy seen at the start of the year may prove shortlived.
Retail sales volumes rose by a stronger than expected 1.2 per cent from March, the biggest monthly increase since November, the Office for National Statistics said. Annual sales growth picked up pace to 4.7 per cent.
The pound jumped to its highest level in two months against the euro and strengthened by one per cent against the dollar.
“This robust April reading is a great springboard to a strong second quarter gross domestic product reading,” said Alan Clarke, an economist at Scotiabank.
Quarterly growth in the April to June period could accelerate to one per cent after slowing to 0.3 per cent in the first three months of 2015, he added.
Some of the sharp increases in sales were due to a surge in purchases of clothing, textiles and footwear, which jumped by 5.2 per cent in April from March, the biggest monthly rise in four years, though one which might prove to be a one-off boost.
“You’ve had warmer than average weather which has led to consumers bringing forward purchases of summer clothing,” an ONS official said.
Excluding fuel, sales were also up by 1.2 per cent in monthly terms and by 4.7 per cent compared with April last year.
A drop in fuel sales in March, when oil prices showed some recovery from their previous slump, had caused overall retail sales in that month to plunge by 0.7 per cent.
By contrast, fuel sales in April rose 2.0 per cent from March, the ONS said.
Britain’s consumers have been the main driver of the country’s economic recovery, which began in 2013. A fall in inflation, which turned negative in April for the first time since 1960, and a pick up in wages have helped restore some of the spending power lost in the years after the financial crisis.
Manufacturers are having a tougher time than retailers.
A monthly survey by employers group CBI showed factory orders slowed to their lowest level in seven months in May although companies remained optimistic about the short term outlook as the euro zone shows signs of recovery.
HSBC economist, Elizabeth Martins, said the strong retail sales numbers suggested consumers were finally starting to respond to the boost in spending power brought by last year’s slump in oil prices and a recent tentative pick up in wages.
But food sales fell by 0.1 per cent in April, underscoring a weakness in demand faced by some supermarkets.
Asda, the British arm of US retailer Walmart, reported its worst quarterly sales in more than five years on Tuesday, and its chief executive said customers were “not yet cash confident”.
