British retail sales rose slightly more than expected last month but January's huge decline was even sharper than previously reported, official figures showed today.
The Office for National Statistics said sales rose 0.5% in February versus analysts' forecasts for an increase of 0.4%. That brought the annual rate up to 2.1%, as expected. Sales in January, however, are now seen as having fallen by 1.6% instead of the 1.3% fall originally reported.
The ONS said the underlying rate of retail sales growth slowed further in February, contrasting with faster growth at the end of last year, as the quarterly rate slowed to 0.5% from 1.3%, its weakest in five months.
Bank of England policymakers are counting on a pick-up in consumer spending to drive economic growth this year but the latest figures suggest that recovery is far from assured after a sharp retail slowdown through most of 2005.
The ONS said textiles, clothing and footwear sales jumped 3% in February but the big monthly increase reflected very weak outturns for the previous two months and simply brought sales activity back to normal levels. Fashion chain French Connection posted a sharp fall in profits this week.
Households goods stores have also been having a tough time with sales falling 1.1% in February. Flooring specialist Floors 2 Go Plc also reported a big drop in profits this week and MFI Furniture Group said last month it was cutting more than 1,000 jobs after poor sales wiped out profits in 2005.
The ONS said that overall prices were on average 1.1% lower than a year earlier but this assumption was based on old data as the February inflation numbers were not out yet. This increased the possibility of the latest numbers being revised even more than normal.
