- David Tinsley, economist with UBS
UK retail sales unexpectedly jumped in Aprils as warm weather boosted clothing demand the most in four years. The volume of sales including auto fuel soared 1.2% from March, the Office for National Statistics reported, after the 0.7% decline in the preceding month and compared with economists' expectations for a 0.4% gain. Clothing and footwear sales were the biggest contributor to retail sales growth, jumping 5.2%, the biggest gain since April 2011. In the three months through April, retail sales increased 0.7% from the previous three month-period. They have now risen for 26 consecutive quarters, the longest streak of sustained growth since records began in 1996. Sales were also boosted by lower costs, driven mostly by cheaper oil and food in international markets. Average store prices declined for the 10th month in a row, with gasoline stations curing prices the most.
The UK economy expanded at a slower pace during the first quarter of this year, fuelling concerns about hurdles undermining the recovery such as weak productivity. Last week, the Bank of England revised downwards its growth forecast for 2015 to 2.4% from 2.9% it estimated in February. However, the central bank's policy makers say they believe GDP growth will accelerate during the second quarter and that disappointing earlier figures for the first quarter are likely to be a subject to revision. The second estimate of UK's GDP is scheduled on May 28.
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