British retail sales fell slightly more than expected in March but upward revisions to past months left growth over the quarter strong and showing little sign of the credit crunch hitting consumers.
The Office for National Statistics said today sales fell 0.4 per cent last month, putting them up 4.6 percent on the year.
Analysts had forecast a smaller monthly fall of 0.3 per cent but the annual rate was higher than the 4.3 per cent they expected.
Sales in the three months to March were 2.0 per cent higher than in the last three months, the highest rise since July 2006 as already-strong growth in January and February was revised even higher.
Sterling rose on the strong quarterly picture as dealers bet the Bank of England would be reluctant to cut interest rates aggressively, especially after meeting minutes showed yesterday that two policymakers opposed this month's decision to cut borrowing costs.
Although soaring food and energy prices have grabbed the headlines, the figures show retailers are still cutting prices which are on average 1.2 per cent lower than a year ago.
Policymakers, however, are still worried that the fall in the pound and rising commodity prices will send inflation further over the 2 per cent target in the coming month.
The breakdown of the latest data showed textile, clothing and footwear sales fell 1.7 per cent on the month, leaving volumes lower on the year for the first time in nearly 10 years.