UK: Retail spending dips – ING

James Smith, Developed Markets Economist at ING, explains that at -0.5%, the latest month-on-month fall in UK’s retail sales rounds off what has been a dreadful quarter for UK retail.

Key Quotes

“Admittedly, there’s little doubt that the seemingly endless episodes of snow and bad weather in March will have played a major role. That saw sales of goods from household goods to clothing fall during March, as many shopping centres/retail outlets remained closed completely during the spells of adverse weather.”

“But this is unlikely to tell the full story. It is certainly true that the household squeeze is no longer at its worst – inflation is easing, whilst wage growth is finally showing signs of life. But we don’t foresee real incomes rising significantly any time soon either. And partly for this reason, consumer confidence remains low, particularly when compared to Europe and the US, where shoppers are the most optimistic they’ve been for well over a decade.”

“None of this is likely to stop a rate hike in May from the Bank of England.”