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UK retail sales surprise with a 1.4 percent increase

Retail sales in the United Kingdom increased unexpectedly in April, according to official data released on Friday, but the outlook for consumer spending remains pessimistic as the cost-of-living crisis worsens.

Retail sales in the United Kingdom increased by 1.4% month on month, while sales dropped by 1.2 percent in March, according to the Office for National Statistics.

The April increase was fueled in part by a 2.8% increase in the amount people purchased from grocery stores.

According to the ONS, non-food store sales fell 0.6% in April.

Reuters polled economists, who predicted a 0.2% monthly drop in April retail sales.

Heather Bovill, ONS deputy director for surveys and economic indicators, stated, “Retail sales picked up in April after a drop last month.” However, these figures continue to show a longer-term downward trend.

“The April increase was driven by an increase in supermarket sales, led by alcohol, tobacco, and sweet treats, with off-licences as well reporting an increase, possibly due to people staying in more to start saving money.”

Retail sales fell 0.3% in the three months to April, following a 0.7% drop in March.

However, the overall picture remains bleak.

Last month, the UK’s inflation rate increased at its fastest rate on record, highlighting the country’s cost-of-living crisis.

According to the ONS, Consumer Price Index inflation increased to 9% in April from 7% in March.

The ONS estimates it was the highest level since 1982, and it was the fastest measured rate increase since official records began in 1989.

Separately, the GfK survey of consumer confidence in the United Kingdom fell to its lowest level since records began in 1974.

According to the long-running survey, consumer confidence is now lower than it was during the global banking crisis or the Covid shutdown, as cost-of-living pressures rise.

It comes as UK unemployment reaches a 50-year low, with vacancies outnumbering job seekers for the first time, and inflation reaches a 40-year high, fueled by rising food and fuel prices.