Retail sales slump bodes ill for UK economy
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Retail sales in Britain saw their biggest quarterly fall in seven years between January and March.
It's a horrible set of retail sales numbers
Market strategist, BGC partners
In shops and online sales volumes were down 1.4 percent from the previous three months, the Office for National Statistics said.
In March they fell 1.8 percent from the previous month.
It is the latest sign that rising prices are putting pressure on consumers,
Inflation has picked up since last year’s vote for Britain to leave the European Union as the much weaker pound has increased costs for imported goods and raw materials.
Quarterly fall in #UK retail sales is biggest fall since Q1 2010. The common factor today and 2010 was the sharp rise in inflation.
— Azad Zangana (@AzadZangana) April 21, 2017
Mike Ingram, market strategist with BGC partners, called it “a horrible set of retail sales numbers”.
He said: “Retail sales inflation is at the highest level we’ve seen in about five years at 3.2 percent. So again, you are seeing these prices being passed on to shop shelves. Wages remain under some pressure in the UK, so all other things being equal, you are seeing a falling real disposable income in households.”
#Retail#Sales in biggest quarterly fall since 2010.#Fx#Pound#Brexit#defstar5#makeyourownlane#Mpgviphttps://t.co/jnJ4hkY8Lw
jjpjolly</a> <a href="https://t.co/l1x6FCjr1R">pic.twitter.com/l1x6FCjr1R</a></p>— Fintech Trading Tech (BourseetTrading) April 21, 2017
“Families are facing the fastest rise in living costs for over three years and they are reining in their spending rapidly,” Richard Lim, chief executive of the Retail Economics consultancy, said.
That is not good news for the UK economy which relies heavily on consumer spending.
The first estimate of GDP growth for the early part of the year is due out next week.
Analysts expect it to be 0.4 percent, down from 0.7 percent in the final three months of last year.