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LONDON / Bloomberg
UK retail sales fell for a second month in March as Britons bought less of everything from food to clothing.
The volume of sales dropped 1.3 percent from February, far more than the 0.1 percent decline forecast in a Bloomberg survey. Sales excluding auto fuel fell 1.6 percent, the most since January 2014.
The Office for National Statistics, which published the data on Thursday, also revealed that public-sector borrowing overshot official forecasts in the latest fiscal year.
A 4.8 billion-pound ($6.9 billion) budget deficit in March — less than the 6 billion pounds forecast by economists — left the full-year shortfall at 74 billion pounds, or 3.9 percent of gross domestic product. That compares with the 72.2 billion pounds forecast by the Office for Budget Responsibility last month.
Retail sales gained 0.8 percent in the first quarter, suggesting a sector accounting for 5.7 percent of GDP made little contribution to growth during the period.
Consumers buoyed by record employment and low inflation have been the engine of the expansion as global woes take their toll manufacturing and exports.
Food sales fell 1.9 percent in March from February, the biggest decline since January 2014. Non-food sales declined 1.5 percent as clothing and footwear, household goods and department stores all saw declines. Sales of auto fuel climbed by 0.5 percent.
Overall retail sales rose 3.7 percent in the first quarter from a year earlier. They gained 2.7 percent in March from a year earlier. Measured by the deflator, prices at stores — including petrol stations — fell an annual 3 percent in March.
The public finances data showed the deficit in March was the smallest for the month since 2006. Central government receipts rose 5.4 percent and spending climbed just 0.8 percent. However, the net investment declined.
The cash measure used to calculate how much the Treasury needs to borrow in the financial markets came in at 78.4 billion pounds in 2015-16, instead of the 75.5 billion pounds predicted by the OBR. It means the Debt Management Office may announce today it is increasing planned gilt sales in 2016-17 from the 129.4 billion pounds currently planned. The figures confirmed that Chancellor of the Exchequer George Osborne has already failed on one of his fiscal targets. Instead of falling as promised, net debt as a share of GDP rose in 2015-16 to 83.5 percent from 83.3 percent a year earlier.
That leaves him under pressure to deliver on his central ambition to return the public finances to surplus by the end of the decade. Net borrowing in the latest fiscal year fell from 91.7 billion pounds, or 5 percent of GDP, in 2014-15.