Retail sales rise as shoppers reap "noflation" in February

 
Jessica Morris
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Retail sales beat expectations in February (Source: Getty)

Retail sales beat expectations as low prices encouraged people onto high streets across the country in February, figures out today show.

Sales on the high street rose 5.7 per cent annually according the Office for National Statistics. It marked the 23rd consecutive month of year-on-year growth, the longest winning-streak since May 2008.

Retail sales grew 0.7 per cent on a monthly basis, beating economists' expectations for a 0.4 per cent rise. Additionally, the original estimate of a 0.3 per cent fall in January was revised up to 0.1 per cent rise.

The data pushed the pound up 0.7 per cent to $1.4995, a one-week high against the greenback.

High streets were flooded by shoppers in search of cheap goods, as prices fell by 3.6 per cent on a monthly basis, the largest annual fall since current records began in 1997.

And they splurged about £26.5bn last month, up from £26bn spent in February 2015.

Nonetheless, is seems price falls affected individual stores differently, and while food sales were unchanged, there was evidence that consumers were taking advantage of cheaper petrol prices.

"Within predominantly food stores, volume and value growth has been fairly flat throughout the period, seemingly unaffected by falling prices," the ONS said.

"This suggests that consumers continue to buy the same amount at these stores and may have spent the money they save in other categories."

"However, petrol stations saw an increase in the quantity bought but a fall in the amount spent, suggesting consumers were taking advantage of falling prices at the pumps."

Economists said shoppers should make the most of low prices while they last, because inflation is forecast to start rising again by the end of the year.

"With inflation having dropped to zero, the 1.6 per cent increase in pay seen in the three months to February was the largest real-terms increase in regular employee earnings since January 2008," Chris Williamson, chief economist at Markit, said.

"However, after going negative in the spring, inflation looks set to start rising again by the end of the year, meaning we need to see pay growth picking up to ensure the upturn remains intact."

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