British retail sales rose much more than expected in April with most sectors doing well, official data showed today, suggesting that consumer spending is holding up despite the recession.
But government borrowing hit a record high for the month of April - the first month of the new tax year - as the shrinking economy batters the public finances.
The Office for National Statistics said retail sales volumes rose 0.9 percent last month, nearly double analysts' forecasts of a 0.5 per cent gain. In March, sales rose 1.1 per cent on the month.
On the year, sales rose 2.6 per cent in April after a 0.9 per cent gain in March.
Analysts may still be sceptical about the data following widespread methodological changes to the series. These have led to substantial revisions after criticism that the figures did not tally with other survey evidence.
“Even with the new method they seem to be throwing up figures which many people feel may on the firm side of what they would expect,” said Stephen Lewis, chief economist at Insinger de Beaufort.
Financial markets showed little reaction to the data as they were more focused on a revision to Britain's credit rating outlook by ratings agency Standard & Poors' to negative from stable which caused sharp slide in the pound and gilts.
The ONS retail data showed most sectors, especially department stores, performing well. Non-specialised store sales rose 3.5 per cent on the month, the highest since July 2006.
The ONS said public sector net borrowing hit £8.468 billion in April, compared with £1.836 billion in the same month a year ago. That was a record for the month of April but roughly in line with expectations.
The public sector net cash requirement came in at £5.151 billion, also an April record and versus a surplus of £2.884 billion in the same month last year.
Business investment in Britain fell 5.5 per cent on the quarter in the first three months of 2009, official data showed. On the year, investment fell 6.8 per cent.
Reuters