ONS: UK retail sales recover in January

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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