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Consumers Defy the Crunch by Buying Groceries
Official figures have revealed an unexpected boost for Britain's retail sector in February, largely due to increased sales of groceries.
The Office for National Statistics (ONS) revealed that supermarkets saw a 1 per cent rise in sales compared to the previous three months – a 5.5 per cent increase compared to the same time last year.
The rise follows a further 0.7 per cent growth from November last year to January 2008.
Sales in stores that mostly do not sell food also saw a 0.2 sales increase over the past three months, while the non-store retail and repair sector enjoyed a 7.3 per cent rise.
However, sales in general stores such as department stores fell by 3.6 per cent, according to the ONS.
During February, average weekly retail sales stood at £4.9 billion – some 6.6 per cent higher than at the same time last year.
The largest increase was again seen in supermarkets though, with sales rising by 7.6 per cent over the year.
Analysts were surprised by the ONS figures, after predicting that February sales would decline by 0.2 after the traditional New Year's surge.
"It's hard to see what is keeping consumers spending," said Vicky Redwood of Capital Economics.
"Yet these figures suggest that they certainly are, boosting the chances that the Bank of England's Monetary Policy Committee will hold on to May before cutting interest rates again."
The Bank has stressed the need to soothe economic pressures by keeping a firm grip on inflation, which currently stands at 2.5 per cent. The government's inflation target is 2 per cent.
In March, the Bank kept rates on hold at 5.25 per cent, after cutting them twice last year, in a bid to ease fears over the ongoing credit crunch and stormy weather in the global financial markets.
To see how likely you are to get a line of credit in spite of banks tightening up their lending policies recently, it is worth getting a credit report from a reputable credit check company. Given the current economic climate though, it is better to use any money borrowed to make repayments or pay off any outstanding bills.
Credit Check News posted on 27 March 2008
