-Howard Archer, IHS Economics
Retail sales in Britain unexpectedly declined last month, driven down by a plunge in sales at petrol stations. According to the Office for National Statistics, the volume of sales including auto fuel fell 0.5% in March. In contrast, economists had forecast a 0.4% rise. Excluding petrol, sales climbed 0.2% in March, versus a 0.6% increase in February, which was revised down from an initial estimate of 0.7%. For the three months through March of 2015, sales edged up 0.9%, down from 2.2% in the first quarter of 2014. Economists said the retail data could herald slower growth in the beginning of the year. UK economic growth data for the first three months of 2015 are due to be published next week.
A separate report showed the budget deficit in the fiscal year ended March narrowed more than expected. The shortfall was the smallest for any March in 11 years. Net borrowing excluding public-sector banks came in at 7.4 billion pounds. Government coffers in March were filled by an increase in receipts from income and corporation tax, as well as VAT receipts. Revenue increased 3% and spending declined 3.1%. It resulted in the full-year deficit at 87.3 billion pounds, below the 90.2 billion pounds, the Office for Budget Responsibility estimated last month. The OBR predicts public sector borrowing to fall each year to eventually reach a slight surplus in 2018-19.
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