UK retail sales rose by an unexpected 0.9%, higher than many economists had predicted.
Following on from strong retail growth in December, this figure represents an excellent start to the year, with non-store and online sales acting as key performers.
Gary Stockdale from Vertem Asset Management, Newcastle said: “Today’s announcement of a surprise increase in retail sales figure is clearly welcome news but is in many way reflective of continued discounting by retails, and moderating inflation which has eased the pressure on peoples purchasing power.”
Richard Driver, currency analyst for Caxton FX added: “There was a minor clue from the improved UK consumer confidence figure earlier in the week, however, high street sentiment remains at historically very low levels and nobody saw this coming.
“Some fairly sharp recent declines in UK inflation will have played a part but wage growth has been poor and household incomes remain tightly squeezed so this is a genuine upside surprise.”
Nonetheless, the near-term outlook for the UK economy is downbeat, and huge certainties still remain. Wage growth continues to be sluggish, unemployment is rising and many households are heavily in debt, indicating that challenges are not over yet for retailers.