Euro zone sales up, UK down

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Euro zone sales up, UK down

Euro zone sales up, UK down
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Euro zone retail sales were stronger than forecast in April, rebounding from a slump in March – up 0.9 percent month-on-month and up 1.1 percent year-on-year.

People spent more despite rising inflation, which meant rising food and energy prices cut into disposable income, and the European Central Bank put up interest rates.

The European Union’s statistics office Eurostat issued the figures for the 17 countries using the euro, which are an indication of household demand.

“April’s rebound in euro zone retail sales raises hopes that consumer spending will help support the region’s economic recovery,” said Martin van Vliet, an economist at ING bank.

But Britons haven’t been hitting the shops so much. The latest UK retail sales figures show an unexpected fall in May; they were down 2.1 percent from a year earlier.

That followed a 5.2 percent jump in April driven by the timing of Easter and an extra public holiday for the royal wedding.

Economists said UK consumer spending was likely to remain weak this year as rising prices, muted wage growth and higher taxes erode household income, and public spending cuts and the subdued property market dent confidence.

The British Retail Consortium said May’s numbers gave a truer picture of the challenges facing retailers after two months where the timing of the Easter break and public holidays distorted results

A separate survey showed house prices fell last month at their sharpest annual rate in eighteen months, in a further sign of weakness on the property market.

Prices rose less than expected in May by 0.1 percent, mortgage lender Halifax said. That left average prices in the three months to May down 4.2 percent compared with a year ago.