Retail sales in Great Britain jump despite soaring inflation

theguardian.com:

Consumers in Great Britain carried on spending last month despite the highest inflation rate in 40 years, providing high street and online retailers with a surprise boost.

The Office for National Statistics (ONS) said there was a 1.4% monthly jump in retail sales in April but warned the trend was still weak and said part of the increase might be down to people staying in to save money.

Heather Bovill, the ONS deputy director for surveys and economic indicators, said: “April’s rise was driven by an increase in supermarket sales, led by alcohol and tobacco and sweet treats, with off-licences also reporting a boost, possibly due to people staying in more to save money.

“Clothing sales had a strong month, especially online, with some retailers suggesting consumers were purchasing clothes for summer holidays and weddings.”

Over the three months to April – considered a better guide to the underlying trend than one month’s data – retail sales fell by 0.3% on the previous quarter. The ONS said the trend had been down since last summer.

Even so, the rise in spending came as a surprise to the City, which had expected the arrival of higher national insurance contributions and the new energy price cap to lead to consumer belt-tightening last month. The consensus among economists was for a 0.2% drop in retail sales.

Earlier this week the ONS reported the annual inflation rate jumped from 7% to 9% in April, while the latest snapshot of consumer confidence from GfK showed the mood at its gloomiest since its records began in 1974.

David Baker, the chief investment officer at the auditing and accounting firm Mazars, said: “April’s retail sales figures beat expectations by some distance and reverse a recent trend of falling sales.

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