Shop sales hit by rainy weather

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Retail sales slipped back during a weather-hit January but are still in a much healthier state than a year ago, official figures showed today.

The Office for National Statistics (ONS) said sales volumes were 4.3% higher in January when compared with a year earlier, although the figure was 1.5% lower against the previous month following a bumper Christmas.

Household goods stores are leading the sales revival among Britain's retailers, with volumes up by 9.8% in the best monthly performance since 2007.

Economists said the underlying picture for the retail sector was positive, particularly given the impact of wet weather in the month.

ING Bank economist James Knightley said: "With consumer confidence on a strong upward path, employment rising and wage growth starting to show some hints of life, we look for the household sector to contribute strongly to GDP growth this year."

With store price inflation growth slowing to 0.2% - the lowest level since September 2009 - the amount spent in January increased by 4.4% compared with a snow-hit month a year earlier.

The month-on-month decline in sales volumes comes after a surprisingly strong performance in December, when the figure jumped 2.5%. However January's level of sales was still 0.2% above the average for the final quarter of 2013.

The amount spent online showed a similar pattern, up by 8.9% on a year earlier but down by 3.3% compared with December.

Samuel Tombs, UK economist at Capital Economics, said: "The consumer spending recovery still has some underlying momentum. And looking ahead, sales should be boosted by continued strong growth in employment, rising confidence and the gradual easing of the squeeze on real pay."

For every pound spent in the retail industry last month, the ONS said 42p was in food stores, 41p in non-food stores, 6p in non-store retailing and 11p in petrol forecourt stores.

Food stores have continued to lag behind the rest of the sector, with year-on-year volume growth of just 0.1% last month.

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