The Pound strengthened against most major peers on Thursday following the release of a report which showed that UK retail sales rallied in February, wiping out January’s sharp declines and raising expectations for a stronger showing next month.
According to the Office for National Statistics sales jumped by 1.7% month by month, recovering from the sharp 2% decline recorded in the previous month. Yearly growth advanced by a strong figure of 3.7%.
The figures beat economist predictions for a monthly rise of 0.5% and a yearly advance of 2.5%.
On a three month basis sales were higher by 1.6% than in the previous three, meaning that sales were at their highest level since August of last year.
“These figures are welcome news for retailers, particularly when viewed against the backdrop of the extreme weather conditions that affected large parts of the country during February. They suggest that consumer confidence is heading in the right direction and the sector is benefiting from an improved outlook.
‘Looking further ahead, price cuts particularly in the grocery sector, will benefit consumers in future months, although this will impact upon margins for both retailers and their suppliers. Retailers will look to the arrival of spring as a further opportunity to maintain positive momentum,” said the managing director of the retail sector at Lloyds Bank.
The cause for the surge in sales was as a result of increased food sales, with supermarkets and often food retailers contributing up to half of the growth recorded. Consumers are growing more confident as the UK economy recovers and with data released earlier in the week showing that the inflation to pay rise gap is shrinking economists expect next month’s retail sales figures to be even better than today’s figures.
The Office for Budget Responsibility said that it estimates that earnings will outpace inflation by the end of the year, ending a 5 ½ year squeeze on living standards.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6631 ,
Pound Sterling,,Euro,1.2090 ,
Pound Sterling,,Australian Dollar,1.8004 ,
Pound Sterling,,Canadian Dollar,1.8449 ,
[/table]
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