The UK retail sales reported their biggest quarter-on-quarter decline in January-March 2018, after the unusually cold and snowy weather apparently left home buyers. The retail sales volume in March shrunk by 1.2% after an increase of 0.8% was recorded in February. Last month, analysts’ consensus forecast was down, but 0.5%.
For the first quarter, the retail sales volume fell by 0.5% compared with the last three months of 2017, the largest quarterly decline since the first three months of last year. This is likely to slow the growth of gross domestic product in the first quarter by 0.03 percentage points.
The big stores report that there is an increase in demand for goods purchased through Internet, especially around holidays such as Mother’s Day and Easter.
The biggest increase in March was gasoline sales – by 7.4%, which is probably the result of the unfavorable climate conditions for trips. The sales of food and non-food products reported a decrease of 0.6%.
Already last month, the Central Bank of England said that the coldest of the usual times would temporarily slow down economic growth, but without affecting the basic picture that clearly shows that it is necessary to move to higher interest rates.
The data that came out earlier this week about slowing the rate of inflation acceleration, cast doubt on economists’ expectations of raising interest rates next month.
The central bank, however, is likely to stick to its view that the labor market is ready for wage increases, as unemployment is 42 years old.