Retail sales recovered in January after the heavy snowfall in December knocked sales.
According to the Office for National Statistics (ONS), the volume of retail sales rose 1.9% in January on a monthly basis.
Not only did the figures exceed analysts’ forecasts of a 0.5% rise, it was way ahead of December’s 1.4% monthly fall.
Meanwhile, on an annual basis, sales volumes were 5.3% higher in January – the best annual increase for more than six years. Again, this was better than analysts forecasts of an annual increase of 4.1%.
However, it must be highlighted that sales growth could be attributed to heavy discounts and a rush to beat the VAT hike on 4 January.
Furthermore, the figures compare to January 2010 – when the country was hit by severe disruption due to snow and ice.
Meanwhile, VAT was lifted from 17.5% to 20% on 4 January 2011 and this is expected to impact negatively on future consumer spending.
Furthermore, rising inflation means consumers are facing higher prices.