UK retail sales rebound as drivers stock up on fuel
The increase of 0.7% reverses a revised 0.6% decline in March, defying economists’ expectations of no change
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[LONDON] UK retail sales unexpectedly soared in March, with the country’s motorists rushing to forecourts to fill up on fuel – as petrol prices surged in light of the Middle East conflict.
The volume of goods sold online and in stores rose 0.7 per cent, reversing a revised 0.6 per cent decline in March, the Office for National Statistics said on Friday (Apr 24).
The increase defied economists’ expectations of no change.
Irrespective of the effect of motor fuel sales, the report also suggested consumers were largely unfazed by the immediate impact of the first US strikes against Iran on Feb 28, when oil prices rose above US$100 a barrel.
In recent months, many Britons have increased their savings. They are partly shielded from higher global energy prices until a price cap on household bills ends in June.
Excluding motor fuel, retail sales still increased by 0.2 per cent.
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The data completed a snapshot of the UK economy ahead of a key Bank of England interest-rate decision on Apr 30.
Policymakers face a difficult trade-off between a weakening jobs market and growing price pressures – with inflation at 3.3 per cent, driven by surging motor fuel costs.
A separate report by market-research company GfK on Thursday showed that confidence slid in April, as consumers started to feel the impact of higher prices at the pump.
However, the effect on sentiment so far has been relatively muted compared with previous crises, such as the 2022 cost-of-living shock triggered by Russia’s invasion of Ukraine. BLOOMBERG
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