British retail sales unexpectedly fell in March driven by declines at household goods stores and non-store retailing, official figures showed today.
The Office for National Statistics said sales fell 0.1 per cent on the month, confounding analyst forecasts for a 0.4 per cent gain.
The annual growth rate declined to 2.7 per cent, its lowest since August 2003. The figures may concern policymakers at the Bank of England, who have already identified a consumer slowdown as a key risk to the economy and may boost expectations that interest rates will remain steady at 4.75 per cent in coming months.
The figures also suggested that higher prices reported for some consumer goods may have deterred shoppers on the High Street, given that the retail sales deflator rose to -0.7 per cent from -1.4 per cent in February and its highest in more than a year. Household goods sales fell 0.6 per cent on the month.
The ONS said that the seasonal adjustment it made to account for the fact Easter holidays fell in March this year rather than April as they did last year, shaved 1.1 percentage points off the annual growth rate.
In the three months to March retail sales grew 0.3 per cent after a 0.6 fall in the prior three-month period which was the worst such performance in two years.