Retail sales fell by 1.4% during the first three months of 2017 as shoppers were put off by rising prices. It was the biggest quarterly fall in sales since 2010.
- French PMIs: strong growth signalled in April
- French shares fall, euro slips from three-week high as vote looms
- Eurozone surveys indicated stronger growth in Q2
The sharp fall in retail sales in the first quarter is the clearest sign yet that a UK slowdown is underway, according to Andrew Sentance, a former member of the Bank of England’s Monetary Policy Committee.
These latest retail sales figures show that the post-Brexit surge in consumer spending has come to an abrupt end.
It is not surprising to see consumers reining in their spending. Inflation has caught up with pay growth, so real incomes of workers are no longer rising. Employment growth has also slowed sharply over the past six months, even though unemployment remains historically low.
Average shop prices (including fuel), increased by 3.3% over the year to March, which was the sharpest rate of growth since March 2012.
The biggest contribution came from petrol stations, where average prices rose by 16.4% year-on-year.