Rise in fuel prices hits UK retail
The Office for National Statistics (ONS) has revealed that UK Retail sales increased by 3.7% in February 2017 compared with the same period 12 months earlier and increased by 1.4% compared with January 2017 across all store types.
However, the underlying pattern suggested by the three-month on three-month movement decreased by 1.4% for the second month in a row, which is the largest decrease since March 2010 and only the second fall in December.
“February’s retail sales figures show fairly strong growth, though the underlying three-month picture shows falling sales as February’s figures follow two consecutive months of decline in December and January,” said ONS statistician Kate Davies.
“The underlying trend suggests that rising petrol prices in particular have had a negative effect on the overall quantity of goods bought over the last three months.”
The ONS reports an average of £1.20p forecourt price for a litre of petrol in February, with diesel 3p more.
The rise in fuel and food costs pushed inflation beyond the Bank of England’s 2% target in February to hit its highest level since September 2013, with the ONS reporting that the Consumer Price Index (CPI) measure of inflation rose from 1.8% in January to 2.3% last month.
The move – the first above-target rise since November 2013 – will increase pressure on the Bank’s Monetary Policy Committee (MPC) to increase interest rates beyond 0.25% in 2017.
ONS deputy national statistician Jonathan Athow said: “Inflation has risen to its highest rate for almost three-and-a-half years with price increases seen across a range of items but with food and fuel having the largest impact.”