Retailers and factories enjoy a ‘Boris bounce’
GROWTH prospects have received a double boost as retail sales rallied in January and manufacturing showed signs of recovery from its lengthy slump.
Official figures showed shoppers last month bought 0.9 per cent more items, the biggest rise since last March and after falls in the previous two months.
After the worst year on record for UK retail, consumers also increased their spending by 1.2 per cent, with strong demand for clothing and footwear.
Despite the upturn, sales volumes in the three months to January fell 0.8 per cent from the previous quarter, while the amount spent declined 0.5 per cent.
Ian Geddes, head of retail at Deloitte, said: “Consumers have entered the new decade on a confidence high, counteracting the seasonal dip that January usually brings.”
Ayush Ansal, at Crimson Black Capital, said the retail sales data offered more evidence of the “Boris bounce”, while the prospect of an interest rate cut is becoming “more remote by the day”.
He added: “In just one month retail has gone from a dark place to a sector with grounds for optimism.”
A separate CBI survey pointed to “early signs of a turnaround” in manufacturing, 10 per cent of output.
The business lobbying group found total and export order books at their strongest positions in six months, although output volumes fell for a fifth rolling quarter in a row.
Manufacturers expect output to recover in the three months ahead. CBI lead economist Alpesh Paleja said: “It is encouraging to see manufacturers reporting some early signs of a turnaround in activity, but it’s probably too early to say whether we’ve seen the end of the slowdown in the sector.
“The upcoming budget offers a real opportunity to support manufacturers and shore up competitiveness.”