Warm spell helped lift retail sales

Panic buying of petrol and unseasonably warm weather lifted retail sales figures for March today.

Volumes rose 1.8 per cent between February and March, the Office for National Statistics (ONS) said, which was the strongest rise for more than a year and well ahead of City expectations.

Fears of a tanker drivers’ strike caused people to stock up on petrol, driving a 4.9 per cent increase in sales at fuel stores, the highest March rise since records began in 1996.

Meanwhile, garden centres and clothes retailers were given a boost by the heatwave in the month.

The rebound in sales comes after a 0.8 per cent decline in February and will fuel hopes that figures released next week will show the economy dodged a return to recession in the first three months of 2012.

Howard Archer, chief UK and European economist at IHS Global Insight, said the figures might indicate the UK economy grew in the first three months of the year.

Archer added: “The retail sales data brought some excellent news for the UK economy and support belief that the economy is seeing modest underlying expansion.

“Given the dominant role of consumer spending, it is certainly difficult to equate the 0.8 per cent quarter-on-quarter increase in retail sales in the economy with an economy that is not growing.

“Nevertheless, consumers still face significant pressures which are being reinforced by sticky inflation, so they seem likely to remain cautious overall in their spending in the near term at least.”