UK retailers saw sales jump more than expected last month, recovering from heavy rain that kept people home the month before.
The volume of goods sold in stores and online climbed 0.5 per cent from March, when sales fell 1.2 per cent, a figure that was revised weaker, the Office for National Statistics said on Friday. Economists had expected an increase of 0.3 per cent.
The rebound indicates consumers are surprisingly resilient in the face of a cost-of-living squeeze, with sales gaining in three of the past four months. That puts further pressure on the Bank of England to raise interest rates as it attempts to bring down a stubbornly high inflation rate.
Sales rose for every category tracked by the ONS except for fuel and household goods. Sales volumes in the three months through April rose 0.8 per cent, the strongest since August 2021.
Investors increased bets on further rate hikes after a shock inflation reading on Wednesday showed price pressures are not subsiding as quickly as hoped. They are now pricing in a peak of at least 5.5 per cent by September, up from the current rate of 4.5 per cent.
The figures come after an estimated 19.2 million families saw welfare benefits surge by 10.1 per cent in April as the government sought to protect the least-well off from rising food and energy costs.
Consumers received a further boost on Thursday, when the energy regulator announced that gas and electricity prices are set to fall by 17 per cent in July for most British households.
An easing of the squeeze on family budgets has helped to lift consumer confidence. An index compiled by GfK climbed again in May to the highest level since February 2022, shortly before energy and food bills were sent soaring by Russia’s invasion of Ukraine. -- Bloomberg
