LONDON: UK retail sales showed a surprise fall last month, driven by a slump in petrol sales, adding to concerns that economic growth slowed at the start of the year.
The first-quarter GDP numbers will be released, just over a week before the general election.
The volume of retail sales dropped 0.5% in March from February, with petrol stations reporting a 6.2% decline, the biggest in just under three years, the Office for National Statistics said. The fall wrongfooted City economists, who had been expecting a 0.4% increase. Excluding fuel, retail sales rose 0.2% – still below City forecasts.
The pound took a hit after the figures were released, falling below $1.50.
Some economists said the surprise reverse in retail sales was further evidence that economic growth was slowing, following weak industrial production and construction data. Alan Clarke, at Scotiabank, said: “It may well be that consumers maxed out before Christmas in a discount fuelled frenzy and the post-Christmas period is experiencing a pause for breath.
The monthly data all point towards sluggish first-quarter GDP next Tuesday, not the sort of reading that the coalition government will be hoping for. Prior to these numbers my gut feel was 0.5% quarter-on-quarter [for GDP], but I’m now toying with 0.4%.”
