-Mark Carney, BoE Governor
British retail spending continued to rise in February, suggesting falling inflation has encouraged consumers to spend, according to the British Retail Consortium. The value of UK retail sales increased 1.7% last month from February last year, following the annual 1.7% rise in January. However, retail spending on the like-for-like basis, which strips out new stores and more closely shows how stores report sales to shareholders, ticked up 0.2% on the year, the same pace of growth as January. Retail sales volumes rose sharply in the fourth quarter of 2014 to the highest level in a decade. Robust sales partly pointed to improved confidence and an increase in consumer credit supply. Economists and policy makers believe low inflation and cheaper energy should continue to underpin spending throughout this year.
In a testimony before the House of Lords Economic Affairs Committee, Mark Carney, the BoE Governor, said UK inflation has declined to the lowest level since the Inflation Targeting introduction two decades ago. Consumer prices are likely to slid further to around zero in the foreseeable future and hover around that levels for much of the year. Carney highlighted that it is inappropriate to use additional monetary stimulus in an attempt to reverse falling inflation triggered by falling oil prices.
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