U.K. retail sales rose at the fastest pace in more than three years in February as demand for clothes and home furnishings increased, the British Retail Consortium said.
Sales at stores open at least 12 months, measured by value, increased 2.7 percent from a year earlier, the London-based trade group said in an e-mailed report today. Excluding distortions caused by the timing of the Easter holidays, that’s the biggest increase since December 2009.
The report follows a survey by GfK last week that showed U.K. consumer confidence held steady in February as optimism about personal finances rose to the highest in almost two years. While the Bank of England has forecast a “slow but sustained” recovery for the economy, consumer-spending growth may be restrained by rising energy bills and accelerating inflation.
“There are certainly highly welcome signs here of gradual improvement and customers feeling a bit more positive,” said BRC Director-General Helen Dickinson. “But it’s too soon to assume this represents the permanent turnaround we need.”
Retail-sales growth in January was partly held back by snow across most of the country. In February, “relatively dry, if cold, weather” helped to lift clothing sales, the BRC said. The retail group also said there was a decline in frozen burger sales after tests found horse DNA in some meat products.
With the Bank of England’s Monetary Policy Committee preparing for its monthly meeting this week, further information on the strength of the economy will be published at 9:30 a.m. today when Markit Economics releases its index of services activity for February.
Economists in a Bloomberg News survey forecast that the gauge will fall to 51 from 51.5, indicating cooling growth. A separate Markit index last week showed manufacturing unexpectedly shrank in February, reviving concerns the economy could contract again this quarter.
The BRC report showed that in the quarter through February, same-store retail sales rose 1.5 percent from a year earlier. Food sales gained 1 percent, with demand for non-food increasing 1.9 percent.
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