- Kate Davies from the Office for National Statistics
It was not difficult to predict stronger-than-expected retail sales figures from the U.K. on Wednesday, keeping in mind subdued inflation as well as later timing of Easter this year. The ONS showed that retail sales entered the second quarter on a high note, bolstering the case for the upbeat Q2 growth figures.
Sales at British retailers advanced 1.3% in April, with sales in all sectors posting increases, particularly food stores, with only sales of fuel disappointing markets. This is a significant acceleration from 0.1% a month earlier, and more than triple the median estimate. On a year-on-year basis sales rocketed 6.9%, with food sales posting its strongest annual growth since January 2002. Furthermore, the average weekly spending jumped 13.3% to 707.5 million over the observed period. The indicator, however, has shown more modest growth in the coming month, as consumers will be more restrained after splashing out at Easter. Extremely positive figures outweighed dovish MPC minutes, which showed policymakers see no reason for tightening even though their assessments on the economy appears to have differed. They also said it is hard to predict the impact on the economy as soon as they start raising rates.
On the back of strong retail sales, the cable skydived to 1.6920, penetrating weekly R1 at 1.6907 and heading towards 1.6930 and then 1.70-mark.
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