According to a recent report by the Office Of National Statistics (ONS), retail sales saw yet another increase last month, despite challenging conditions.
The ONS reported an increase of 0.3% in April, with clothing and footwear retailers enjoying the biggest boost, with a rise of over 2% over the course of the month.
With unemployment still high, having reached 2.5 million in March, and the worry over tax increases, high inflation, a hung-parliament and a generally uncertain future, this has certainly surprised many market analysts.
An economist at the Centre for Economics, Jorg Radeke, commented:
“Today’s data supports the picture of an established recovery in the retail sector following the disruptions at the beginning of the year. This is even more remarkable as low earnings growth and above target inflation have a negative impact on spending power.
“Going forward the retail industry is facing considerable challenges in the form of potential tax increases, rising cost of living and sluggish earnings growth. Against this backdrop, retailers are likely to struggle to keep the modest growth momentum seen over the last couple of months.”
With the change in Government and the threat of an increase in VAT to help pay-off the UK’s deficit, many retailers still fear the impact this could have on consumer confidence. However, the Government’s plans to slash corporation tax could help reduce the blow this could have on retailers across the country.