UK retail sales fell back further than predicted in March to cap off the first quarterly decline since 2013, according to new data from the Office for National Statistics, in the latest sign that rising inflation is beginning to weigh on economic growth.
Total retail sales excluding auto fuel fell by 1.5 per cent compared to the previous month, bringing the year on year growth rate down to 2.6 per cent, from 4.1 per cent the previous month.
Economists had expected only a 0.5 per cent monthly decline and year on year expansion of 3.8 per cent.
Last month’s monthly figures were better than economists had expected, but were already showing signs of a slowdown on a quarterly basis. Sales including fuel in the three months to March declined by 1.4 per cent, the first quarterly decline since 2013.
The pound reversed course to slip 0.2 per cent against the dollar on the day at $1.2782.
Kate Davies, senior statistician at the ONS, pointed to recent rises in inflation, saying the decline “seems to be a consequence of price increases across a whole range of sectors”.
The data follow unofficial figures released by the British Retail Consortium last week, which showed retail sales excluding food dropped at the fastest quarterly rate in nearly six years at the start of the year.
Slowing retail sales arebad news for the UK’s wider growth prospects, as strong consumer spending was key to propping up the country’s growth rate last year.