Britain's leading retailers today reported their biggest rise in sales for four years last month, according to the latest figures to point to an acceleration in the UK economy.
Total retail sales in April were 9.8 per cent higher than a year ago, as the timing of Easter delivered a much-needed injection into the tills of beleaguered high street stores. Excluding shop space opened or shut in the past 12 months, the growth in like-for-like was 6.8 per cent, the British Retail Consortium said.
Both figures were the highest since March 2002 when consumers took advantage of the sharp cuts in interest rates after the September 11 attacks.
Earlier this month the CBI, the UK's largest employers' group, said its survey of retailers showed the first rise in sales for 14 months in April.
However, the BRC said the figures were exaggerated by a 4.7 per cent slump in like-for-like sales in April 2005, adding that sales for the February to April quarter were flat. "Discounting has also played a big part in these results," Kevin Hawkins, the BRC's director-general, said. "We need to see the figures for May before forming any tentative conclusion." The BRC said Easter and the warm weather helped clothing and footwear stores, and gave an uplift to the DIY sector.
Recent figures have shown an upturn in house prices, service sector activity, factory output, mortgage lending and consumer confidence.
The synchronised economic upturn, combined with figures showing households' inflation expectations have hit a seven-year high, has prompted analysts to predict the next move in interest rates is upwards.
Central bankers of the G10 group of rich countries warned yesterday inflationary expectations were starting to rise during a period of high commodity and energy prices. Jean-Claude Trichet, the president of the European Central Bank who chaired the meeting, urged policymakers to pay "very special attention" to the inflationary threat.
"It is not the time for complacency if we want this global growth to be sustainable," he said after the meeting. "We have to be careful to see that this period of global growth does not end up in inflation."
In the UK, official figures showed manufacturers had succeeded in passing on the impact of the largest rise in raw materials costs in nine months. The Office for National Statistics said input prices rose 2.5 per cent in April, the highest annual increase since July and well above forecasts for a rise of 1.6 per cent. It was driven by a 10.6 per cent rise in crude oil costs and the largest rise in imported and copper and platinum since March 2004.