Official figures show that British retail sales unexpectedly fell in March, driven by declines at household goods stores, particularly furniture.
The Office for National Statistics said sales fell 0.1% on the month, confounding analyst forecasts for a 0.4% gain. The annual growth rate declined to 2.7%, 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 British interest rates will remain steady at 4.75% in the coming months.
The data also suggested that higher prices reported for some consumer goods may have deterred shoppers, given that the retail sales deflator - which measures retail prices - rose to -0.7% from -1.4% in February and its highest in more than a year.
Household goods sales fell 0.6% 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.
