Retail plunge blamed on inflation

News


21 Apr, 2017

Retail plunge blamed on inflation

Retail sales dropped by a worse than expected 1.8% last month as price increases weighed on the market, official figures show.

The month-on-month fall in sales volumes was much larger than the 0.2% slip expected by economists and experts, and comes as consumers face a squeeze from accelerating inflation.

Statistics from the Office for National Statistics (ONS) also revealed a 1.4% decline over the first three months of the year - the first quarterly decline since 2013.

In tandem with these developments, average store prices went up 3.3% compared to the same period last year - the largest growth since March 2012 chiefly pushed by petrol stations.

ONS senior statistician Kate Davies said the decline "seems to be a consequence of price increases across a whole range of sectors".

It follows separate statistics last month that showed wage growth had slipped down to the rate of inflation, meaning the real terms value of pay for households is not going up.

Scotiabank economist Alan Clarke said the figures added to evidence that official UK growth figures published next week will show a marked slowdown - and that Bank of England officials would be more hesitant about considering an interest rate rise.

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