February retail sales jump 1.7% beating expectations
Thursday 27 March 2014
Despite the wettest February since 1990 retail sales jumped 1.7 per cent over the month, rising three times faster than expected, official figures showed today.
The resurgence comes amid falling unemployment and inflation easing to a four-year low of 1.7%, heralding the prospect of a return to real-term pay growth for the first time in five years.
February’s sales growth was far above the 0.5% pencilled in by City economists. The surprise strength means that even if retail sales stagnate in March retail sales would still be up 1% over the first quarter. This would add 0.2 percentage points to overall growth, as retail spending accounts for 22% of the wider economy.
BNP Paribas economist David Tinsley said: “With such wet weather in February, if anything it seemed possible we would get a downward shock. In the event it was an upside whopper.”
Grocers accounted for the bulk of sales growth although non-store retailing — nearly two-thirds of which is internet sales — advanced 7.9% in February, marking the strongest month for the category since August 2006.
Less volatile quarter-on-quarter figures compiled by the Office for National Statistics meanwhile showed growth for the 12th month in a row — the longest period of sustained growth since November 2007.
But the spending spree has also raised questions over the sustainability of the recovery, as the Office for Budget Responsibility warns shoppers are fuelling consumption through digging into savings. But wages finally overtaking inflation this year would set the scene for a more long-lasting revival.
The Bank of England’s Financial Policy Committee is meanwhile keeping an eye on a rapidly-recovering housing market, which is also encouraging shoppers to open their wallets.
A statement following its meeting last week said: “Given the increasing momentum, the FPC will remain vigilant to emerging vulnerabilities, will continue to monitor conditions closely and will take further proportionate and graduated action if warranted.”
The retail recovery follows disappointing data on trade and production, although business investment spending is showing an upturn.
- 1 East 17 bandmember Brian Harvey in 'very desperate situation’
- 2 Is this bridge haunted by the ghost of nu rave?
- 3 Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
- 4 The West has it totally wrong on Lee Kuan Yew
- 5 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
East 17 bandmember Brian Harvey in 'very desperate situation’
Vladimir Putin says Russia will fight for the right of Palestinians to their own state
Is this bridge haunted by the ghost of nu rave?
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
Saudi Arabia says it won't rule out building nuclear weapons
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
The West has it totally wrong on Lee Kuan Yew
Revealed: Putin's army of pro-Kremlin bloggers
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...