Eurozone retail sales bounced in April
Retail sales across the eurozone saw an unexpected bounce in April, despite rising inflation and a European Central Bank interest rate rise.
Sales in the 17 countries using the euro rose 0.9 per cent month-on-month in April and 1.1 per cent compared with April 2010, following a decline in March, EU statistics office Eurostat said.
Economists polled by Reuters had expected a 0.4 per cent monthly increase and a flat annual reading.
“April’s rebound in euro zone retail sales raises hopes that consumer spending will help support the region’s economic recovery,” said Martin van Vliet, economist at ING bank.
Sales increased despite inflation rising to 2.8 per cent year-on-year in April, above the ECB’s two per cent target, on rising food and energy prices.
But economists noted the region’s fiscal tightening and rising commodity prices were likely to keep household spending in check.
“These … two headwinds will continue to act as a restraint on consumer spending in the remainder of this year. That said, with consumer spending in many ‘core’ countries showing signs of recovery, the ECB remains on course to cautiously tighten monetary policy,” van Vliet said.