British retail sales suffered their biggest monthly fall in nine months in February and were revised sharply downwards for January, official data showed on Thursday, dampening hopes that a consumer revival this year will boost the economy. Sales data is well-known for its volatility but the latest figures are still consistent with a sluggish underlying recovery.
Central bankers and the government have been betting on a modest recovery in consumer spending in 2012 as falling inflation should leave Britons with more money to spend, and the February drop comes as a surprise after a recent set of solid results from major British retailers.
Coming the day after finance minister George Osborne's annual budget gave little help for dejected consumers, Office for National Statistics' data showed that retail sales volumes fell 0.8 percent on the month in February to give an annual rise of 1.0 percent - both well below economists' forecasts.
January's sales growth figures were revised down to 0.3 percent from 0.9 percent on the month, with the ONS blaming late data from smaller stores which failed to maintain their previous strong growth. But British retail sales data is typically volatile - both on the ONS measure, and that produced by industry body the British Retail Consortium. Thursday's data shows that the annual rate of growth in retail sales values stood at 3.2 percent in February versus 3.7 percent in January, closing much of the gap with the BRC's measure, which registered 2.3 percent growth in February.
In a sign that consumers may be healthier than the latest figures suggest, the government's independent forecasting unit, the Office for Budget Responsibility, revised up its forecast for household consumption growth this year to 0.5 percent on Wednesday. Supporting that view, the ONS figures showed that retail sales in the three months to February were 1.7 percent higher than a year ago, the biggest increase since December 2009.