Retail sales in the U.K. rose unexpectedly to close the first quarter of the year on stronger food sales, partly erasing a significant decrease during the prior month, according to The Daily Telegraph. On Thursday, the Office for National Statistics reported that retail sales volumes increased by 0.2% in March from the previous month, defying economists’ expectation for a 0.5% decrease. The gain pushed retail sales to a 1.3% year-over-year increase, which also beat expectations for a 0.9% annual gain. The positive data represents a rebound after retail sales shed 0.9% in February.
The report cited strong food sales as a driving factor behind the overall increase, and the monthly data capped a 0.3% gain in retail sales during the first quarter of 2011. The growth indicates that retailers will make a modest positive contribution to gross domestic product growth for the first quarter in a report due next week. The data came on the heels of a very weak survey from the British Retail Consortium, and could somewhat reassure Bank of England policymakers in the stability of U.K. consumer demand.