UK retail sales unexpectedly grew last month, official figures revealed today, as department stores bucked the gloomy trend on the high street.
Retail sales volumes grew by 0.2% month-on-month in March, the Office for National Statistics (ONS) said, against expectations of a 0.5% decline.
Department stores increased 1.4% month-on-month, the ONS said, while the launch of Apple's iPad 2 and the Nintendo 3DS helped lift sales at computer and telecoms stores.
While food stores reported a 0.7% month-on-month increase in sales volumes, they saw a 0.1% annual decline, as rising food prices are forcing consumers to be more cautious with their spending than they were a year ago.
Economists had expected sales volumes to decline in March following a raft of disappointing company updates and dismal surveys from the likes of the British Retail Consortium.
Meanwhile, the British government modestly undershot its expectations for public borrowing in the last financial year by nearly £5 billion, official figures revealed today.
Public sector net borrowing, excluding financial interventions such as bank bail-outs, was £18.6 billion in March, the Office for National Statistics said, bringing the total for the financial year 2010/11 to £141.1 billion.
The total for the fiscal year was less than the £146 billion forecast by the tax and spending watchdog, the Office for Budget Responsibility, which is used by the Treasury to set its fiscal policy. The March borrowing figure was in line with City expectations.
British Chancellor George Osborne is rolling out deficit-busting austerity measures, which include £81 billion of spending cuts and January's VAT hike from 17.5% to 20%.
Economists have warned that the impact of the fiscal squeeze will start to kick in this month so the rate at which public finances improve over the coming months will be critical.
