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British retail sales jumped unexpectedly in April as shoppers loaded up on alcohol and tobacco, likely a blip in an otherwise bleak trend that has driven consumer confidence to all-time lows amid a worsening cost-of-living crunch.
Retail sales volumes rose 1.4per cent month on month after a 1.2per cent drop in March, the Office for National Statistics said. Economists polled by Reuters had expected a 0.2per cent monthly fall.
The wider picture remains disconcerting. Retail sales in the three months to April fell 0.3per cent, after a 0.7per cent drop in March. Compared with a year ago, sales volumes were 4.9per cent lower, marking the biggest annual drop since January 2021.
Earlier on Friday, Britain’s longest-running gauge of consumer confidence, the GfK survey, fell to its lowest since records began in 1974.
British consumers were hit last month by a double whammy of surging household energy costs and higher taxes, and data published this week showed inflation hit a 40-year high of 9.0per cent.
The Bank of England thinks inflation will climb above 10per cent later this year.
“So far, the conflicting signals coming from the data are consistent with our call that the UK will stagnate in Q2,” said economists from Berenberg Bank.
Sterling was little changed against the dollar after the data.
The ONS said food store sales rose by 2.9per cent in April, largely driven by strong sales of alcohol, tobacco and ‘sweet treats’. This was “possibly due to people staying in more to save money,” ONS statistician Heather Bovill said.
Online clothes sales also did well as people got ready for summer holidays and weddings, she added.
Leading supermarket groups including Tesco (TSCO.L) and Sainsbury’s (SBRY.L) have warned of lower profits this year and Premier Foods (PFD.L), the maker of Mr Kipling cakes and OXO stock cubes, said it would raise prices of its products.