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U.K. Retail Sales Fall Most in Two Years as Rain Hits Demand

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May 23 (Bloomberg) -- U.K. retail sales fell the most in more than two years in April as record rainfall reduced demand for clothing and fuel sales plunged.

Sales including auto fuel declined 2.3 percent from March, when warm weather helped lift sales by an upwardly revised 2 percent, the Office for National Statistics said today in London. The median forecast of 24 economists in a Bloomberg survey was for a 0.8 percent decline. Sales excluding fuel dropped 1 percent.

Consumers spending is being curtailed as inflation outpaces wage growth and unemployment remains close to a 16-year high. Marks & Spencer Group Plc, the largest U.K. clothing retailer, cut its sales forecast yesterday and said the economic environment is “challenging” with Britain in its second recession since 2009.

“Households continue to struggle,” Andrew Smith, chief economist at KPMG in London, said before the data were released. “Real wages are still falling and the headwinds of elevated unemployment, low wage growth and high inflation look set to remain a drag on the economy.”

Sales were hampered by wet weather, with April registering the largest amount of rainfall for the month since records began in 1910, according to the Met Office.

The drop in sales was led by 5.2 percent decline in clothing and footwear. Food sales fell 0.6 percent.

Sales of fuel plunged 13.2 percent, the most for any month since records began in February 1996, with retailers reporting difficulties in replenishing stocks after a wave of panic buying in March in anticipation of strike by tanker-truck drivers.

Stripping out the impact of fuel and wet weather, retail sales would still have posted a decline on the month, the statistics office said.

From a year earlier, sales including fuel fell 1.1 percent, the statistics office said. In the three months through April, sales growth slowed to 0.2 percent from 0.7 percent in the first quarter.

While U.K. inflation slowed more than economists forecast last month to 3 percent, wages rose just 0.6 percent in the three months through March, the least since 2009, as firms slashed bonuses. The unemployment rate was 8.2 percent in the period.

The retail sales deflator, a measure of changes in shop prices, rose an annual 1.7 percent in April compared with a gain 2.6 percent in March, the statistics office said.

Pessimism over the economic outlook as the euro-region crisis intensifies has driven down share prices. The General Retailers Index has fallen 6.7 percent this month compared with an 8.5 drop in the broader FTSE 350 Index.

To contact the reporters on this story: Fergal O’Brien in London at; Gonzalo Vina in London at

To contact the editors responsible for this story: Craig Stirling at; To contact the editors responsible for this story: James Hertling at