International
Price cuts lift UK retail sales | Price cuts lift UK retail sales |
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Big cuts in prices helped UK retail sales to rebound more than expected in January, official figures show, but underlying growth remained steady.
Sales grew by 0.8% last month, helped in particular by cheaper electrical goods, after a 0.2% fall in December. Growth in the three months to January compared with the previous three months - seen as the best underlying trend figure - rose slightly to 0.6%. Analysts said the figures meant an early cut in UK rates was unlikely. Price pressures The figures highlight the fact that consumer spending has slowed down significantly in recent months. While the ONS said that underlying sales volumes remained "steady", the 0.6% growth figure for the three months to January compares with a figure of 1.4% in September last year. "We strongly suspect that retail sales were lifted in January by increasingly pressurised and price conscious shoppers being particularly keen to take advantage of genuine bargains in the sales," said Howard Archer, chief UK economist at Global Insight. "Nevertheless, the marked pick-up in retail sales in January reinforces our belief that the Bank of England is unlikely to cut interest rates again until May." The Bank of England has cut interest rates twice since December, to the current level of 5.25%, in an attempt to prevent an economic slowdown.
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