UK Shoppers Keep On Spending As Brexit Approaches: Study
British retailers racked up surprisingly strong sales last month, reinforcing how spending by consumers is a bright spot for the economy ahead of Brexit.
Retail sales grew by an annual 4.0% in February, the top end of a range of forecasts by economists in a Reuters poll, and down only slightly from January's two-year high of 4.1%, official data showed.
Mild weather last month boosted spending at garden centres and on sporting equipment, offsetting a fall in spending at supermarkets and in clothing stores after sales promotions in January, the Office for National Statistics said.
"It is possible that some consumers brought forward purchases amid concern prices could rise if a disruptive Brexit at the end of March sees sterling weaken sharply," Howard Archer of economic consultancy EY ITEM Club said.
Consumer spending has been a source of strength for the world's fifth-largest economy at a time when businesses say that Brexit uncertainty is forcing them to postpone investment and a slower global economy is hurting export demand.
Thursday's data showed sales volumes in February alone rose 0.4% versus a forecast of a decline in the Reuters poll. Annual sales growth for the three months to February was its strongest in over two years.
Falling inflation, a steady rise in wages and the lowest unemployment since 1975 have all boosted household incomes over the past year, though wages are still below their peak before the financial crisis after factoring in inflation.
Separate figures from the ONS showed the government was likely to meet its updated borrowing goals for the 2018/19 financial year, as Britain's jobs boom boosted income tax revenue.