Friday May 18, 12:57 PM
British retail sales disappoint in April
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LONDON (AFP) - British retail sales fell by 0.1 percent in April from the figure in March, as department stores and household goods retailers performed poorly, official data showed Friday.
Economists predicted that the data would not deter the Bank of England's Monetary Policy Committee (MPC (A050540.KQ - news) ) from tightening monetary policy, having increased British interest rates to 5.50 percent earlier this month.
Meanwhile, retail sales were 4.2 percent higher last month, compared with April 2006, the Office for National Statistics added.
The numbers fell short of analysts' consensus forecasts for a monthly gain of 0.7 percent and an annual increase of 4.7 percent.
In contrast, figures for March were revised upwards to show month-on-month retail sales growth of 0.5 percent, from the initial estimate of 0.3 percent, and a year-on-year rise of 5.0 percent, compared with 4.8 percent.
"April's dip in sales should not dissuade the MPC from tightening again over the next few months -- the trend in sales growth remains solid," Investec (LSE: INVP.L - news) analyst Philip Shaw said.
HSBC economist Karen Ward added that the sales drop justified the Bank of England's recent run of interest rate hikes.
"The bank (TBHS - news) needed to see the consumer reining in on spending and that past interest rate rises were having an effect."
She added: "This release should provide them with some comfort that this reaction is indeed occurring."
The BoE has raised rates four times since August last year -- each time by a quarter of a percentage point -- as it seeks a handle on inflationary pressures.
- National Statistics Online (Website of the Office for National Statistics)
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