January Retail sales buoyant this January.

The U.K. retail sales doubled the economist’s estimation of a 0.3 percent rise.

The Office for National Statistics revealed that sales have climbed by 0.8 percent since December that represents the biggest increase in 11 months despite the discounting offered by consumer goods stores and supermarkets.

According to economist Peter Dixon “Strong discounting helps to support sales volumes and this shows the consumer is not quite dead showing the case for a near-term interest-rate cut is looking pretty shaky.”

Dixon believes that there will be further reductions to the benchmark interest rate by the BOE, even though the upward trend in sales is likely to continue.

Furniture, electrical goods and home-improvement stores led a 0.4 percent rise, whilst food sales have increased 0.7 percent

It was a widespread concern that the current cut in lending would strain consumer spending and hamper economic growth.

Timothy Besley, a Bank of England policy maker said that: “we might expect a significant reduction in consumption growth as households have 1.4 trillion pounds ($2.7 trillion) in outstanding debts.”

With weakening property values and further inflationary pressures is likely to discourage spending although the reaction of consumer spending is still difficult to predict.

Story link: January Retail sales buoyant this January.