UK retail dip creates caution on recovery

The volume and value of UK retail sales fell over the course of February, official numbers show, prompting fresh concerns over the health of the country’s recovery.

According to Office for National Statistics, retail sales dropped by 0.8% last month when compared to January and values eased by 0.4%. Both are at their lowest level since May 2011.

In addition, the increases in January’s retail sales volume was revised down by 60 basis points to 0.3%.

Samuel Tombs, UK economist at Capital Economics, says: “February’s UK retail sales figures leave the recovery on the high street looking a bit more fragile than it previously seemed.

“While a monthly drop in retail sales volumes was widely expected, the 0.8% drop was bigger than we or the consensus had anticipated.”

Howard Archer, chief UK and European economist at IHS Global Insight, adds: “The data puts a real dent in hopes that the consumer may be perking up appreciably and tempers hopes that GDP will see a relatively decent return to growth in the first quarter.”