The surprisingly strong 0.7% m/m gain in retail sales volumes in March (CE forecast +0.5%, consensus +0.1%) meant that they rose by a chunky 1.6% q/q in Q1 overall. But April’s drop in consumer confidence due to higher fuel prices, and our view that higher unemployment and CPI inflation will mean it falls further in the coming months, suggests annual real retail sales growth will stagnate before long.
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