U.K. retail sales logged a better-than-expected expansion in March, boosting hopes of a good economic growth number in the first quarter.
Including automotive fuel, retail sales volume grew 1.8 percent month-on-month, recovering from February's 0.8 percent drop, data from the Office for National Statistics showed Friday. The rate of growth topped the 0.5 percent rise forecast by economists and marked the biggest rise since January 2011.
Clothing sales rose 2.3 percent due to warm weather, while the 4.9 percent increase in petrol sales indicate panic about fuel stocks.
As overall sales reflect temporary factors, it will struggle to rise further in April, said Samuel Tombs, U.K. economist at Capital Economics. Nonetheless, the underlying growth in sales was strong, he added.
While March's retail sales are hugely encouraging, the fact remains that there is currently still a lot of pressure on consumers, so they seem likely to be cautious overall in their spending over the next few months at least, said IHS Global Insight Chief U.K. economist Howard Archer.
Annually, it was up 3.3 percent, which was more than double the 1 percent increase seen in the previous month and well above the consensus forecast of 1.5 percent rise.
Sales by predominantly automotive fuel stores underpinned the recovery. Predominantly food store sales were down 0.6 percent year-on-year, while non-food stores sales increased 4.6 percent.
Excluding automotive fuel, retail sales volume rose 1.5 percent month-on-month, rebounding from a 0.7 percent drop in February. Sales climbed 2.8 percent from the previous year, following the 1 percent rise in the prior month.
Economists had forecast a 0.4 percent monthly growth and 1.3 percent annual expansion.
Internet sales, which accounts for 8.5 percent of retail sales values excluding auto fuel, surged 15.2 percent from March 2011. The retail sales deflator climbed 2.5 percent annually after rising 2.4 percent a month ago.
The Office for National Statistics is set to release quarterly national accounts for the first quarter on April 25. The International Monetary Fund raised 2012 growth outlook for the U.K. to 0.8 percent.
At the monetary policy meeting in April, policymakers of the Bank of England did not rule out that the publication of official data may show GDP falling for three successive quarters. But, members said the economy appeared likely to be expanding, albeit only modestly, in the first half of the year.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org