GBP Bounces Higher After Strong ONS UK Sales Data

Average store prices including fuel accelerated to 2.8% year on year, up from 1.9% in January and the largest growth since March 2012, with an 18.7% rise from petrol stations a key element of the impact on consumers from rising inflation. Drivers bought exactly the same amount of fuel in February 2017 as they did a year earlier, but the amount they spent rose by 1.7 per cent as the higher price of crude oil pushed up the cost of a tank of petrol.

Ecommerce growth was well ahead of retail sales growth, according to the Office for National Statistics' Retail Sales report for February.

Sales rose by 3.7 per cent compared with past year after a 1.4 per cent increase compared with January 2017, according to the Office for National Statistics (ONS).

Sales volumes will need to grow 3.2 percent month-on-month in March just to have been flat quarter-on-quarter.

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EMarketer expects United Kingdom retail ecommerce sales to rise 12.0% in 2017 to £77.74 billion ($104.93 billion) and represent 18.8% of total retail sales for the year. For multichannel retailers, which have both an online and in-store offering, growth in sales made on mobile devices was up slightly year-on-year, while the average basket value of online retail sales in general rose by almost £20.

"As a result, with credit conditions remaining supportive, and consumers' confidence in the outlook for their own finances still quite strong, we expect overall household spending to slow this year, rather than collapse outright", Hollingsworth said. However, this was not enough to make a dent in the 1.4 per cent decline seen over last three months, marking the worst decline since 2010.

Retail sales account for around 30 per cent of household spending and is seen as a crucial indicator of underlying activity.

The ONS said the Consumer Price Index measure of inflation reached 2.3% last month, up from 1.8% in January.

  • Sonia Alvarado