Retail sales in the UK fell in the first quarter of 2017, marking the first time that sales have seen a quarterly fall for three years.
Prices rising at their fastest pace since 2012 as the pound exchange rate weakened has been seen as the main cause for the fall in consumer spending.
The weakening of retail sales is expected to hamper UK economic growth, which has been boosted by on-going consumer spending following the Brexit vote. The pound fell a further 0.4 per cent on the release of the figures.
The data, released by the Office for National Statistics (ONS) showed that retail spending – excluding petrol – fell sharply by 1.5 per cent in March, fair greater than the 0.5 per cent that experts had expected.
Economists are expecting economic growth of 0.4 per cent during the first quarter of the year, down from the 0.7 per cent recorded during the last quarter of 2016.
Barclays, who also predict 0.4 per cent growth for the first quarter, commented: ‘We expect the drag from household consumption to intensify in the course of this year and lead to further slowdown in activity, even though we continue to forecast low but positive quarterly growth rates throughout.’
The Office of National Statistics consider the fall in retail sales ‘a consequence of price increases across a whole range of sectors’, and estimates that the retail sales decline could reduce quarterly economic growth by 0.08 per cent.
The first official estimate of economic growth during the first quarter of 2017 is due any time now, and is likely to be closely scrutinised leading up to the recently announced general election.
There are now less than six weeks until the general election set by the Prime Minister for June 8th.