British retail sales fell unexpectedly in April at their sharpest pace in nearly 13 years, an industry survey showed today, bolstering the view that interest rates will remain on hold next week.
The Confederation of British Industry's monthly distributive trades survey showed 32% of retailers reported sales volumes up on the year but 46% said they were down, giving a balance of -14, the lowest since July 1992.
That followed a balance of -9 in March and compared with analysts' expectations of +2 while survey respondents themselves last month had predicted a balance of +3.
'This ongoing decline in sales is likely to reflect the recent fall in real disposable incomes, higher fuel and utility bills, reduced activity in the housing market and higher mortgage rates than a year ago,' the CBI said.
Retailers are not hopeful of a dramatic improvement this month. The expectations balance dropped to +1, its lowest since October.
Sales for the time of year were also weak at -36 after a -37 reading for March. CBI said trading was poor in most sectors, particularly for chemists, furniture and carpets, while clothing sales fell for the first time since March 2004. Household durables shops, booksellers and grocers all marked sales growth in April.
The slump in sales comes after a raft of evidence suggesting British consumer spending is running out of steam after five interest rate hikes since November 2003.
In recent weeks, home improvement retailer Kingfisher, clothing chain Next and general merchandise store Argos have blamed falling sales on waning UK shopper demand.
