UK retail sales volumes fell by a more-than-expected 1.4 per cent in March, according to data released today by the Office for National Statistics. The monthly fall, the second in a row, was caused mostly by a large drop in online sales, which fell almost 8 per cent over the month.
Data from market research firm GfK’s consumer confidence barometer, which tracks UK consumers' views of their finances and the economy, revealed meanwhile that consumer confidence in April fell to its second-lowest level in almost 50 years. The only month sentiment was worse was in July 2008, during the global financial crisis.
Although retail sales do not reflect all consumer spending, the fall was much bigger than the 0.5 per cent fall expected by economists polled by Reuters.
Taken together, the indicators suggest that the cost-of-living crisis is forcing households to cut back on spending to cope with price rises in food and fuel. Inflation is at the highest rate for 40 years, while the current fall in real wages is set to continue until late 2023.
Earlier this week the International Monetary Fund predicted that the UK economy would have the slowest growth among the G7 in 2023.