Boost in retail spending for February

Although the government has expressed concern over the low level of consumer confidence and the knock on effect that this has been having on the economy over recent months, February figures showed that there was a surprise boost in retail spending in the UK, indicating that despite strained household finance many consumers are continuing to spend in their normal way.

The figures suggest that strong food sales contributed to a surge in retail sales over the month of February, resulting in a 1.0% increase – which was far better than the 0.2% drop that many industry experts had predicted. This has resulted in a rise of 5.5% on the year, rather than the predicted 3.6%.

One economist stated: “February’s surprising sharp jump in retail sales, if taken at face value, suggests that a consumer slowdown hasn’t even begun yet. It’s hard to see what is keeping consumers spending.

Yet these figures suggest that they certainly are, boosting the chances that the Bank of England’s Monetary Policy Committee will hold on to May before cutting rates again.”

The figures relating to retail sales have been compiled by the Office for National Statistics. Having seen the figures many industry officials have stated that consumers are continuing to fight against the effects of he credit crunch, which is reflected in these healthier-than-expected figures.