U.K. retail sales unexpectedly rose in March; gained 0.4% on the month

Published 25/04/2025, 07:10
Updated 25/04/2025, 07:12
© Reuters

Investing.com - U.K. retail sales unexpectedly rose in March, climbing despite consumers’ confidence being hit by the turmoil unleashed by U.S. President Donald Trump’s tariff announcements earlier this month.

Retail sales rose 0.4% last month, slipping from a revised 0.7% gain in February, according to data released by the Office of National Statistics data earlier Friday. 

Economists had predicted that retail sales, which mostly reflect goods and are not adjusted for inflation, would drop by 0.3%.

Retail sales rose by 2.6% on an annual basis, above the 1.8% growth expected, having increased by 2.2% in February.

The strength of the U.K. shopper belied the drop in confidence, which was illustrated by a survey published on Thursday by the British Retail Consortium.

The trade body said its balance of consumer sentiment about the state of the economy sank to its lowest in at least a year at -48 in April, down from -35 in March.

The survey was based on a poll of 2,000 consumers between April 4 and April 7, shortly after Trump announced minimum tariffs of 10% and higher tariffs for most of the United States’ main trading partners.

"With fieldwork completed just days after Donald Trump’s ’Liberation Day’ tariffs, it is unsurprising that consumer expectations for the economy plummeted," BRC Chief Executive Helen Dickinson said.

The U.S. tariffs are a major headache for the U.K. government and Chancellor Rachel Reeves will meet later Friday with U.S. Treasury Secretary Scott Bessent. 

Reeves is looking to make a deal with the U.S. which would reduce the impact of the tariffs. 

The Bank of England decided to keep its benchmark Bank Rate at 4.5% at its last meeting in March, citing persistent inflation pressures in Britain’s economy.

However, it is widely expected to cut rates in May as the U.K. economy struggles, with the International Monetary Fund stating earlier this week that three more reductions are likely this year despite the higher-than-expected inflation.

The organisation predicted U.K. inflation would be the highest in the world’s advanced economies this year at 3.1%, but also said the U.K. economy would grow less than previously predicted, up 1.1% in 2025 instead of 1.6%, because of the global fallout from the U.S. trade tariffs.

 

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