By Daniel Hunter
Data released today (Thursday) revealed that retail sales in the UK fell by 0.8% in February as retailers across the country continue to feel the pinch.
According to Richard Driver of Caxton FX the figures were surprising, and believes it is a reality check for the retail industry.
"This morning’s UK retail sales figure certainly caught the market by surprise," said Richard Driver, analyst for Caxton FX.
"We were confident spending was going to moderate significantly after December and January’s bumper growth figures as that trajectory was never sustainable. Nonetheless, -0.8% m/m is very disappointing and the slight downward revision to the previous two month’s figures is a reality check for the retail industry.
"Yesterday’s Annual Budget announcement highlights that UK households are going to remain tightly squeezed for the rest of this year but with inflation falling and growth slowly picking up, there is room for optimism.
"It is not all doom and gloom however, as some high street heavyweights like Next and Debenhams posted some decent profits recently and with the Olympics on the horizon, as well as the relaxing of Sunday trading laws, the UK retail sector could be in line for a much-needed boost.
"We were expecting to see surging petrol prices provide a boost to non- fuel sales as consumers look for more cost-effective ways to spend their money but this simply wasn’t the case."
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