Retail sales growth in January misses forecasts

Retail sales growth in January misses forecasts

The Office for National Statistics said the longer-term trend for retail sales is a "continued slowdown" as on the three months moving average basis the retail sales decelerated to 1.5 percent compared with January 2017, down from rates above 4 percent a year ago.

Sales volumes rose by 1.6pc on the year, falling well short of predictions of a more solid 2.5pc rise.

However, this was more than offset by the positive contributions from non-food stores, which touched 2.6%, as shoppers continued to buy more sports equipment, toys and games during the month.

It was the weakest January sales growth since 2013 with declines across all main sectors except non-food stores.

Retail sales data in the United Kingdom has disappointed experts' forecast for several months now, with December delivering declining sales growth of 1.5%.

'Sporting equipment sales have grown more than usual in January 2018, following an increased uptake for gym wear'. "This can partly be attributed to a background of generally rising prices", said ONS senior statistician Rhian Murphy.

The ONS figures tallied with findings for January retail sales, published earlier this month by the British Retail Consortium (BRC), which highlighted a "tough trading environment" with sales and profits "harder to come by".

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"Get fit and lose weight" New Year's resolutions tipped January's retail sales figures into positive territory after a disappointing December, but weak consumer spending remains a headwind for the United Kingdom economy. A dip in consumer spending power also meant that the UK's broader economy underperformed many of its European counterparts' over the past year.

This is the lowest growth since April 2017, but is an improvement on the -1.5% month-on-month decline recorded in December 2017.

Sales, excluding auto fuel, also grew only 0.1%, following December's 1.5% decrease.

Only last week, the Bank of England warned that the pace of growth was such that an earlier and sharper rate rise path was now likely to prevent the economy exceeding its current speed limit.

"This means we could see an end to falling real wages in the coming months, which would provide a welcome fillip to cash-strapped households".

'Assuming pay growth figures over the next couple of months back up this theory, it still looks like the MPC will have the confidence to raise interest rates to 0.75% in May, ' he added.

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