Retail sales in the UK jumped 6.9 per cent in April year-on-year, making it the strongest annual rise in 10 years, according to figures released by the Office for National Statistics (ONS) yesterday (May 21).
Sales also increased by 1.3 per cent between March and April, confounding expectations of a mere 0.5 per cent rise, providing further evidence of the economic recovery and raising the prospects for an earlier-than-anticipated rise in interest rates.
Within the sales figures, the food sector posted its strongest year-on-year growth since January 2002, increasing by 6.3 per cent, following a better than expected Easter and a prolonged period of good weather. Food sales were also 3.6 per cent up on March.
The ONS said that feedback from retailers suggested promotions also helped to boost sales and this was reflected in the slowing of average prices in the food sector, where increases were limited to 0.9 per cent. Meanwhile, non-food sales rose by 6.5 per cent year-on-year but were down 0.4 per cent on the month.
Quarterly retail sales have now grown for 14 months in a row, leading to estimations of good general economic growth in the second quarter of the year, with employment also rising and earnings growth keeping pace with inflation.
Meanwhile, in separate news, minutes from the May meeting of the Bank of England’s Monetary Policy Committee (MPC) suggest that the Bank might be considering raising interest rates sooner than previously thought.
The minutes say it could be argued that the more gradual the intended rise in the Bank rate, the earlier it might be necessary to start tightening policy, which many analysts are taking to suggest a rise this year rather than next.