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Strong clothing sales defy expectations

UK retail sales edged higher in March, defying City expectations of a fall as clothing, footwear and textiles stores recorded their strongest month-on-month rise in volumes since April 2011, official figures have revealed.

The Office for National Statistics said yesterday that UK retail sales volumes had risen by 0.1% month-on-month in March, on a seasonally adjusted basis. The City had projected a fall of 0.4%.

However, the month-on-month rise in sales volumes in February was revised down from 1.7% to 1.3%.

Retail sales volumes over the first quarter were up 0.8% on the final three months of last year.

Textiles, clothing and footwear stores recorded an overall 3.1% month-on-month rise in sales volumes in March. And sales volumes in this category last month were up 7.1% on March 2013.

However, food sales volumes dropped by 1.4% month-on-month in March.

Non-food sales volumes rose by 0.9% month-on-month in March. They were 9.6% higher than in March 2013, the fastest year-on-year pace of increase since April 2002.

The ONS noted that this leap might partly reflect the negative effect of very cold weather in March last year.

Jonathan Loynes, chief European economist at the consultancy Capital Economics, said: "March's retail sales figures supported the message from other recent indicators that consumer spending retains plenty of momentum."

He added: "There are clearly some doubts over whether consumers can maintain such strong spending growth at a time when real incomes have only just started to grow again after a very long squeeze and savings are low.

"But, if we are right in expecting inflation to fall further and stay low while wage growth picks up further, the consumer recovery should receive more fundamental support over the coming quarters.

"We continue to expect overall household spending to post solid gains of about 2.5%, or possibly more, both this year and next."

Howard Archer, chief UK economist at consultancy IHS Global Insight, said the increase in retail sales pointed to consumer spending having made a very healthy contribution to gross domestic product growth in the first quarter.

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