ECONOMIC OUTLOOK

TWO surveys painted different pictures of consumer spending in the UK.

One survey by the British Retail Consortium and KPMG said excellent Easter sales helped the sector bounce back from a slow start to the year. It said like-forlike sales were up 5.6% in April from a fall of 0.1% in March. This was the fastest rate of like-for-like growth in 11 years.

However another survey by Markit for Visa showed household spending up by just 0.5% year on year in April, down from 1% in March, one of the lowest growth rates in three years. In addition, spending online fell for the first time since 2013, following an 8.2% increase in March.

Retailers are worried about the year ahead, with rising inflation and political uncertainty affecting consumer spending.

House prices suffered their first quarterly decline since 2012, according to Halifax, in a further sign of the property market’s slowdown. While prices increased 3.8% over the past year, they were 0.2% lower in the three months to April compared with the previous quarter. The average house price in the UK is now £219,649, according to the mortgage lender.

Closely-watched business surveys from Markit/CIPS gave positive pictures of the services, manufacturing and construction sectors.

Services, the UK’s dominant business sector, outperformed expectations in April, growing at its fastest pace this year, according to the Markit/CIPS UK Services Purchasing Managers Index (PMI). The index was 55.8 in April, up from 55 in March. Any figure above 50 indicates the sector is expanding.

Meanwhile, manufacturing rebounded in April, with the Markit/CIPS index rising to a three-year high of 57.3, up from 54.2 in March. However the survey noted that the weak pound is pushing up cost pressures for manufacturers. The construction sector index was also upbeat, with a reading of 53.1 in April, up from 52.2 in March.

Shop prices fell 0.5% year-onyear in April, their smallest decline in almost three and a half years, as retailers faced the impact of a weaker pound, according to the British Retail Consortium.

While food prices rose 0.9%, non-food prices fell 1.4% and clothing prices were down 5.4%.

The so-called “Bank of Mum and Dad” has become the ninthbiggest lender in the UK, according to a study by Legal & General.

Record numbers of homebuyers are turning to their parents for loans and gifts to help fund deposits and get on the housing ladder. The value of these loans and gifts has increased 30% since last year to £6.5bn.

The Eurozone’s economy grew 0.5% in the first quarter of 2017, while the wider EU grew 0.4%.

Analysts said the Eurozone’s recovery is becoming increasingly strong after years of fragility, with unemployment now at 9.5% – its lowest level for seven years.