Warm weather and widespread petrol panic helped drive the biggest increase in British retail sales in more than a year in March, raising chances that recovering consumer spending may have helped the economy to avoid recession.
Figures from the Office for National Statistics showed a 1.8pc month-on-month increase in retail sales volumes and a 3.3pc year-on-year rise. The numbers were well above economist forecasts and were driven in part by a 4.9pc surge in fuel buying due to the panic caused by the threat of a delivery drivers strike.
Economists hailed the ONS figures as a sign the UK is growing faster than previously thought. Howard Archer, chief UK economist at HIS Global Insight, said the data was “excellent news”, but warned consumers still faced “significant pressures”.
“With consumer price inflation proving sticky at 3.5pc in March, annual earnings growth limited to 1.2pc in February and fiscal policy tight, the squeeze on purchasing power remains appreciable,” said Mr Archer.
The ONS said that aside from the panic buying of petrol, the unseasonably warm weather in March had driven up sales of clothing and footwear. Yesterday, department store Debenhams announced better than expected profits for the first half of its financial year, which were helped by increased sales of clothing.
“There does seem to have been a step upwards in the underlying growth of high street activity over the past few months which suggests the consumer malaise which prevailed through much of 2011 may be over and done with,” said Philip Shaw at Investec.
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