ONS: UK retail sales recover in January

| February 18, 2011 | 0 Comments

Retail sales recovered in January after the heavy snowfall in December knocked sales.

According to the Office for National Statistics (ONS), the volume of retail sales rose 1.9% in January on a monthly basis.

Not only did the figures exceed analysts’ forecasts of a 0.5% rise, it was way ahead of December’s 1.4% monthly fall.

Meanwhile, on an annual basis, sales volumes were 5.3% higher in January - the best annual increase for more than six years. Again, this was better than analysts forecasts of an annual increase of 4.1%.

However, it must be highlighted that sales growth could be attributed to heavy discounts and a rush to beat the VAT hike on 4 January.

Furthermore, the figures compare to January 2010 – when the country was hit by severe disruption due to snow and ice.

Meanwhile, VAT was lifted from 17.5% to 20% on 4 January 2011 and this is expected to impact negatively on future consumer spending.

Furthermore, rising inflation means consumers are facing higher prices.

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