UK retail sales up 1.4 percent in February, says ONS

UK retail sales picked up by 1.4 percent in February, according to figures from the Office for National Statistics (ONS).

After a slowdown in activity on the High Street for the previous months of December and January, figures for February show a slight turnaround for UK Retail, as consumers remain reluctant amidst continued economic uncertainty relating to Brexit. The figures are 3.7 percent higher than those recorded for February a year previously.

Kate Davies, the ONS senior statistician, said: “February’s retail sales figures show fairly strong growth, though the underlying three-month picture shows falling sales as February’s figures follow two consecutive months of decline in December and January.

“The monthly growth in February is seen across all store types. The underlying trend suggests that rising petrol prices in particular have had a negative effect on the overall quantity of goods bought over the last three months.”

Retail has been particularly affected by the Brexit vote and the subsequent devaluation of the pound that has occurred in the months succeeding the decision to leave the European Union. Whilst for tourists and overseas visitors have benefited from the exchange rate, UK households have begun to feel the squeeze of higher living costs and rising inflationary levels as the pound continues to depreciate.

As a consequence, consumers have continued to curb retail spending, which has impacted UK retail sales significantly. The ONS noted that the drop in retail activity for the quarter in January was the lowest recorded drop since March 2010, notably when the economy was in the throws of a global recession.

Chris Williamson, chief business economist for IHS Markit commented: “The consumer, which has provided the main engine of UK economic growth in recent years, is showing signs of running out of steam. Looking at the underlying trend, retail sales are falling at the fastest rate for seven years as households struggle with rising prices and subdued pay growth.”

Retail giants such as Next (LON:NXT), who on reported their first fall in annual pre-tax profits in eight years, continue to feel the impact of a challenging and uncertain economic climate.

This follows yesterday’s release of UK inflation statistics by the ONS, which revealed that inflation had surged to 2.3 percent for February. Food prices continued to rise upward by 0.3 percent, alongside surging fuel prices.

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