Sterling climbs after rebound in retail sales
THE STERLING rose sharply against the dollar yesterday on the back of stronger-than-expected retail sales, boosting confidence in the strength of the UK economic recovery.
Retail sales rose 1.2 per cent in April on the month, the strongest increase since November, as the warmer weather boosted demand for summer clothing.
The figures, released yesterday by the Office for National Statistics, showed sales volumes rose by 4.7 per cent on the previous year.
Economists had expected retail sales to rise a monthly 0.4 per cent and for sales to be up 3.8 per cent compared with last April.
Sterling rose by more than one per cent against the dollar on the news before closing up 0.9 per cent to $1.567 last night.
IHS Global Insight’s Howard Archer said the rise provided a significant boost that UK GDP growth will regain momentum in the second quarter after slowing to 0.3 per cent in the first quarter.
“This is welcome news, although it may fuel concerns that the economy remains too dependent on consumer spending,” he added.
Sales of clothing and footwear jumped 5.2 per cent in April from March, the biggest rise for four years, helped by low inflation.
But KPMG’s David McCorquodale warned total sales value growth was up a lower 1.8 per cent, with price deflation still impacting retailers.