UK Retail Sales Rise; Consumer Sentiment Weakens

(RTTNews) - UK retail sales grew unexpectedly in March as good weather boosted demand for clothing and garden supplies, but U.S. President Donald Trump's tariff threats and concerns of higher inflation dampened consumer sentiment, data showed Friday.

Retail sales grew 0.4 percent on a monthly basis, confounding expectations for a decline of 0.3 percent. However, this was slower than the 0.7 percent increase in February and marked the third consecutive increase, the Office for National Statistics said.

Excluding auto fuel, retail sales gained 0.5 percent after a 0.7 percent rise. Sales were expected to drop 0.4 percent.

Food store sales declined 1.3 percent and auto fuel sales shrunk 1.0 percent. Meanwhile, non-food store sales grew 1.7 percent largely due to the 3.7 percent increase in clothing and footwear sales.

Retailers cited that good weather brightened sales of DIY goods and clothing and garden centers.

The year-on-year sales growth advanced to 2.6 percent from revised 1.8 percent in February. Sales were expected to grow 1.8 percent.

At the same time, annual growth in core retail sales improved more-than-expected to 3.3 percent from 1.8 percent. Economists were expecting a 2.3 percent rise.

In the first quarter, retail sales climbed 1.6 percent from the fourth quarter, which was the fastest increase since July 2021. There was a 1.7 percent rise in sales when compared to the same period last year.

March's rise was largely due to unusually sunny weather and the drop in consumer confidence in April after the U.S. tariff chaos suggests that households may start to spend more cautiously in the coming months, Capital Economics economist Alex Kerr said.

British consumer sentiment deteriorated in April as households were grappled with multiple April cost increases amid fears of renewed high inflation on the back of the Trump tariffs, survey data jointly published by GfK and the Nuremberg Institute for Market Decisions showed Friday.

The consumer sentiment index fell to -23 from -19 in March. All sub-indices of the index declined in April but consumers' outlook for general economic situation deteriorated the most.