7 months ago • 2 mins
What’s going on here?
Data out on Friday showed UK retail sales were dampened – most likely by a literal downpour – last month.
What does this mean?
Hardy British households had managed to keep spending ticking up in the face of rampant inflation this year. And while that streak was broken in March, hefty price tags mightn’t be completely to blame. England and Wales were hit with their heaviest rainfall in over 40 years, marking the beginning of a beautiful British springtime. That kept shoppers inside and away from the shelves – but even if they made it to the shop, there wasn’t much to buy: shelves were pretty barren after hiccups abroad constricted supermarket supply chains. The weather set the tone: the volume of goods sold in stores and online slipped 0.9% in March from the month before, a much steeper drop than the 0.5% economists expected.
Why should I care?
Zooming in: Grab your rose-tinted glasses.
Even with Friday’s lackluster data, January and February’s robust spending meant retail sales stepped up 0.6% last quarter. That’s the first time a three-month period has marked an increase since August 2021, the heady bounceback period that followed lockdowns. Plus, March’s dip could just be a blip: separate data out on Friday showed consumer confidence dramatically improved in April, jumping to its highest since before war broke out in Europe. And because that’s a forward-looking stat, it could mean the consumer spending picture’s brighter than it looks at first glance.
The bigger picture: Pats on backs all round.
Remember, retail sales only count spending on goods. The data doesn’t include services, which tend to make up a big chunk of all consumer spending – so you can’t make any concrete, far-reaching conclusions based on that alone. But if it’s any solace, the data suggests that the UK’s much more robust than economists thought, and there’s some hope that the country might not shrink this year like the IMF’s predicting.
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