LONDON
UK retail sales rose more strongly than expected in February but the outlook for the British consumer remains weak. The volume of goods sold in stores and online jumped 1.4 per cent, beating the 0.4 per cent gain predicted by economists, Office for National Statistics figures published Thursday show. It left sales down 1.4 per cent in the latest three months, the biggest quarterly drop since early 2010.
The underlying figures add to evidence that households are starting to feel the squeeze from increasing food and fuel prices, bad news for an economy that relies heavily on consumer spending for growth.
Sales will fall in the first quarter unless March sees an unprecedented 3.3 per cent gain. Sales last declined in a calendar quarter more than three years ago.
Inflation is now at its fastest since 2013 is course to overtake wage growth, leaving Britons with less to spend on non-essential items. The price or retail goods sold in February increased on an annual basis by 2.8 per cent, the most since March 2012.
Sales rose across the board in February, with household goods rising 3.7 per cent and clothing growing 1 per cent. Sales were up 3.7 per cent from a year earlier. Excluding auto sales, they gained 1.3 per cent on the month.
The figures may reinforce speculation that the Bank of England is a long way from raising its key interest rate, despite one official breaking ranks this month to vote for an increase. Governor Mark Carney has said policymakers are closely watching consumer spending for signs of weakness.
