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Retail sales in April beat forecasts with a 2.3% rise

Warmer weather helped retail sales to rise by more than expected last month, according to official data.

Sales volumes jumped 2.3% in April from the month before, the Office for National Statistics (ONS) said, and were 4% higher than a year earlier.

April’s rebound contrasted with March, when sales saw the biggest fall in seven years.

“Anecdotal evidence from retailers suggests that good weather contributed to growth,” the ONS said.

The stronger-than-expected rise in sales pushed the value of the pound above $ 1.30 to its highest level since September last year.

David Cheetham, chief markets analyst at XTB, said the figures would “go some way to allay the fears of a slowdown in consumer spending following last month’s sharp drop”.

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Due to recent rises in inflation, the amount spent in shops and online was 6.2% higher in the three months to April compared with a year ago – the biggest rise in 15 years.

The ONS did not say whether inflation pressures would continues to affect sales during the rest of the year. “We need a longer series to properly determine a pattern,” it said.

The retail sales figures come a day after separate ONS figures indicated that wages were rising slower than inflation for first time since mid-2014.

Keith Richardson, managing director retail sector at Lloyds Bank Commercial Banking, said the retail figures were “welcome news, but it’s too early to think that the tide is turning after a dismal first quarter”.

Alex Marsh, managing director of Close Brothers Retail Finance, said its data indicated “a particular increase in sales in the furniture sector, which was driven by [Easter] Bank Holiday Monday shopping”.

However, he added that inflationary pressures meant shoppers could struggle to buy big ticket items, such as white goods, without stores offering more credit.

Chris Williamson, chief business economist at IHS Markit, also urged caution, noting that the underlying three-month trend showed sales were up by just 0.3%.

“With the exception of the first three months of this year, that’s the weakest trend rate since the third quarter of 2014,” he said.

Analysis: Emma Simpson, business correspondent

April delivered a boost for retail. We’ve already had the British Retail Consortium’s survey, which saw the strongest sales numbers for years. But the industry body put much of that rise down to the timing of Easter, which was later this year than last.

Shops tend to sell more stuff during the Easter break. The ONS’s figures are seasonally adjusted, which means that the timing of Easter shouldn’t have been a factor in its own survey this morning. It said warm weather helped deliver growth. The big question is whether this pace of spending can continue.

The squeeze on consumers is now on, with average real wages falling. And it’s not getting any easier for retailers either as they deal with the consequences of the fall in the pound and how much of the associated extra costs they’ll have to pass on to consumers.

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BBC News – Business

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