Surprise jump in UK retail sales

UK-retailBritish retail sales rose much faster than forecast in February, suggesting that the economy’s solid recovery extended into the first quarter of the year, official data showed on Thursday.

Sales volumes compared with January increased at three times the pace expected in a Reuters poll, pushing up the pound. On a less volatile measure, over the three months to February they rose at their strongest pace since August last year.

Consumers, many of them buoyed by a strengthening housing market, have been the driving force behind Britain’s rapid economic recovery even as household income has been squeezed by slow wage growth and high inflation in recent years.

That strain on consumers could begin to ease off soon, with inflation now trending below the Bank of England’s 2.0pc target and wage growth beginning to pick up.

“The UK consumer is powering on, helped by improving pay growth, subsiding inflation and very low interest rates. Even the rain during February did not appear to dampen spirits on the high street,” Rob Wood chief UK economist at Berenberg said.

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