- Clothing and computers boost volumes, reversing December drop
- Figures point to domestic demand continuing to drive growth
U.K. retail sales surged the most in more than two years in January, boosted by demand for clothing and computers.
The 2.3 percent jump in the volume of sales was almost three times the pace of growth forecast by economists in a Bloomberg survey. The Office for National Statistics said post-Christmas price cutting helped, as retailers looked to clear excess stock.
The increase more than reverses the drop in sales in December, when mild weather curbed purchases of clothing. It also reinforces the picture of an economy being largely driven by domestic demand as U.K. inflation close to zero and low unemployment boost consumer spending.
“This is a major boost to first-quarter GDP growth prospects,” said Howard Archer, an economist at IHS in London. “However, it will be tempered by concern that the U.K. economy remains unbalanced and too dependent on consumer spending and the services sector.”
Measured by the retail deflator, prices fell an annual 2.6 percent in January, a 19th straight decline, Friday’s data from the ONS showed.
From a year earlier, retail sales including auto fuel, rose 5.2 percent in January, the ONS said. On the month, food sales increased 1.1 percent and clothing and footwear sales were up 3.3 percent. In the last three months, total sales climbed 1.4 percent, a 26th consecutive increase.