UK retail sales up more than expected

Thu, Mar 29, 2007, 01:00

British retail sales volumes rose twice as fast as expected and at their fastest pace in more than two years in March, a survey showed today.

The Confederation of British Industry (CBI) said its distributive trades survey's reported sales balance came in at +32 in March, up from +19 in February, posting the highest reading since December 2004.

Analysts had forecast a reading of +15. The three-month moving average also picked up, rising to its highest level since July 2004. Retailers expect sales growth to slow only slightly next month with the balance of expectations coming in at +21.

The figures followed robust data on mortgage lending and home loan approvals and reinforced expectations the Bank of England would raise interest rates again before the summer to curb inflation.

The CBI said sales of DIY goods and household appliances were particularly strong, probably due to housing market strength.

Data from the Bank of England earlier showed British mortgage lending growth accelerated unexpectedly in February, while approvals for new home loans also beat forecasts.