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UK retail sales rise by 0.9% in January

Retail sales rose 0.9% in January compared with December, according to the latest figures from the Office for National Statistics (ONS).

The figure was much stronger than forecast as many economists had expected sales volumes to fall.

The report showed particularly strong sales of furniture and sports goods as shoppers were tempted by steep discounts.

It builds on solid December sales when volumes rose by 0.6%.

"All sectors are experiencing some growth when you look year-on-year. In particular the household goods sector has risen from where it was previously, it's ended a long run of contraction." said Kate Davies, head of UK retail at the ONS.

Household goods stores sales volume increased 1.3% from January 2011. Sales values
increased 1.2% over the same period. Average prices showed a fall of 0.7%. In January 2012 an estimated £2.4 billion was spent in this sector.

"The most prominent driver behind this growth comes from the non-store retailing sector [mail order and internet] but also from food stores and clothing stores," she said.

But some economists say the latest figures hide deeper problems.

"January's strong growth goes against the much more pessimistic picture painted by anecdotal evidence and all of the retail surveys." said Samuel Tombs from Capital Economics.

"The rise was partly driven by a strong 4.8% monthly rise in household goods sales, which just seemed to be a bounce back after several months of falls. " he added.

"And more generally, with unemployment on an upward trend, credit conditions tightening and real incomes still being squeezed, the underlying conditions for consumers are still tough."

The figures from the ONS showed that internet sales now account for about 12% of total sales, up from 9% in January last year.

Shop prices are 2.2% higher than a year ago, the slowest rate since November 2009.

Source : BBC News

17 February 2012
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