Retail sales grew ahead of analysts’ expectations in February, but suffered their worst decline for seven years on a three-month basis.
According to the Office for National Statistics, UK retail sales volumes increased 1.4% last month compared to January, easily outstripping the forecasted 0.4% rise.
The February uplift brought an end to a run of three consecutive months of decline.
On a year-on-year basis, sales volumes rose 3.7% in February.
But over the wider three-month period, sales volumes slipped 1.4% – the worse decline since March 2010.
The ONS said that rising petrol prices, sparked by the slump in the value of the pound following the Brexit vote last June, had dented sales.
Clouds on the horizon
Managing director for the retail sector at Lloyds Bank Commercial Banking, Keith Richardson, said: “These figures suggest that even after two months of softer spending, the momentum from last autumn has carried over into 2017. Consumers are keen to spend and taking advantage of the continued low cost of borrowing as necessary.”
But he warned: “There are clouds on the horizon in the shape of higher input costs and domestic rates for businesses.
“Meanwhile consumers are likely to see a squeeze on their disposable income as well as competition to spend it on leisure rather than the high street.
“Taken together, the fear is that those clouds could become a perfect storm.”