Burton Mills - March Weather Causes Decline in UK Retail Sales
Burton Mills - Fall in retail sales affects Q1 growth but BoE remains on course to increase borrowing costs.
TAIPEI CITY, Taiwan, April 24, 2018 (Newswire.com) - Burton Mills economists say more UK shoppers stayed at home last month as they felt the effects of unseasonable cold weather. Official data revealed that this caused the biggest quarterly drop in retail sales in twelve months and hurt overall economic growth for the first quarter.
The Office for National Statistics reported that retail sales declined by 1.2 percent compared with February due to unusually snowy weather. This was a bigger decline than Burton Mills economists had anticipated.
For the first quarter overall, retail sales fell by 0.5 percent compared with the last quarter of last year. Burton Mills economists say this was the biggest drop since the first quarter of 2017.
After the data was released, the pound dropped to a one-week low. Wages increased more slowly while inflation fell more rapidly than predicted. This caused some debate over how many interest rate hikes the Bank of England would implement this year.
Burton Mills economists believe the Bank of England remains on track to increase borrowing costs at its policy meeting next month but there is some doubt over whether it will decide on another rate increase later in the year.
Burton Mills economists say the retail sales figures are expected to rebound in April as, historically sales lost during bad weather have been made up in following months.
The Bank of England does not believe that the drop in retail sales for last month will affect the overall rate of growth that has prompted it to increase interest rates.
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Source: Burton Mills