–Jan retail sales inc. fuel +1.9% m/m; +5.3% y/y
–Jan retail sales ex fuel +1.6% m/m; +5.3% y/y
–Dec retail sales inc. fuel revised down to -1.4% m/m; -0.7% y/y

LONDON (MNI) – Retail sales volumes bounced back sharply in
January, following a weather hit December, with sales boosted by
department and clothing and footwear stores, according to figures
released by National Statistics Friday.

Retail sales volumes including auto fuel rose 1.9% on the month in
January and were up 5.3% on the year, well above the median forecast for
an increase of 0.5% on the month and 4.1% on the year.

The rise on the month in January was the largest since February
2010 and followed a downwardly revised December fall of 1.4% on the
month compared with the initial estimate for a smaller 0.8% decline.

Excluding auto-fuel sales rose 1.6% on the month and 5.3% on the
year.

National Statistics said that the December revision was due to late
data following a lower survey response rate than usual in December,
possibly due to the post being hit by the extreme weather conditions.

In January, sales were boosted by a 2.4% monthly rise in sales at
predominantly non-food stores. Sales at department stores rose 5.7% on
the month, while clothing and footwear and household goods store volumes
rose 3.4%. Food store sales were up a more moderate 0.3% on the month.

National Statistics said that there had been anecdotal evidence
that sales at the start of the month were boosted by consumers bringing
forward purchases ahead of the hike in VAT on January 4.

A spokesperson for National Statistics said that the pattern of
retail sales in December and January had been effected by the snow and
the rise in VAT and that looking at the rise of 0.5% over the two month
period would give a better picture of underlying sales growth.

The sizeable revision to the December figures means that sales fell
during Q4 last year by 0.1% compared with Q3, which will only have a
small marginal downward impact on GDP.

The sharp bounceback in January, however, adds to further survey
evidence that GDP recovered in Q1 from the 0.5% weather related decline
in Q4. Signs of a Q1 growth bounceback will be critical to the Bank of
Englands deliberations of weather the economy is strong enough to
warrant a rise in interest rates to curb inflationary pressures.

–London bureau: 00 44 207 862 7492; email: drobinson@marketnews.com

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