Poor retail figures released by the Office for National Statistics (ONS) this morning have compounded fears of a slowdown in the UK economy during the first quarter of the year.
Sales dropped by 1.3 per cent in March, a much steeper fall than the 0.1 per cent which had been pencilled in by analysts. Prices in stores dropped by three per cent over the last year, marking 21 consecutive months of falling prices, though it was not enough to bring shoppers onto the streets and boost takings at the tills.
"Disappointing" was the word that peppered analysts' responses to the data, while most said they expected growth to come in at a slower pace in the first three months of 2016 than the 0.6 per cent registered in the final quarter of 2015. Official GDP figures will be released on 27 April.
"The large decline in retail sales in March is disappointing, and although longer-term comparisons show that sales are still expanding, the pace of growth is slowing. These figures reinforce our view that UK economic growth slowed in the first quarter of 2016," said David Kern, chief economist at the British Chambers of Commerce.
John Hawksworth, chief economist at PwC said: "The latest retail sales data, showing an unexpectedly large fall in March, were disappointing, adding to the picture of softer UK growth in the first quarter of the year. Consumers, like businesses, may be feeling a little cautious about spending more at present given the uncertainties surrounding the global economy and the EU referendum outcome."
"This fuels concern that the economy is stuttering as heightened uncertainty ahead of June’s EU referendum leads to increasing business and consumer caution," said Howard Archer at IHS Global.
The figures are more gloomy than those released earlier in the month by the British Retail Consortium, which showed that retail sales flat-lined in March.