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LONDON — British shoppers are feeling the pressure of a tightening cost-of-living squeeze with retail gross sales sliding quick and shopper confidence approaching all-time lows, in accordance with information that despatched a recent warning signal for the financial system.

Retail gross sales volumes slid by 1.4% in March from February, a worse studying than any economist forecast in a Reuters ballot that pointed to a 0.3% month-to-month drop, the Workplace for Nationwide Statistics mentioned.

Earlier on Friday, market analysis agency GfK mentioned shopper confidence fell this month near its lowest stage since data started almost 50 years in the past.

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Total the info underscored rising concern on the Financial institution of England concerning the opposing challenges of weakening demand and inflation at a 30-year excessive of seven% and more likely to rise additional past the central financial institution’s 2% goal.

Governor Andrew Bailey mentioned on Thursday the BoE was strolling a good line between tackling inflation and avoiding recession, a problem going through different main central banks all over the world.

“The sharp decline in gross sales in March means that households are already paring again spending to deal with larger prices for meals and gas,” mentioned Bethany Beckett, economist at Capital Economics.

“That’s solely more likely to worsen within the coming months as the price of residing disaster intensifies.”

GfK’s gauge of shoppers’ confidence about their funds sooner or later slumped to a document low.

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The ONS mentioned meals and petrol gross sales fell sharply on the month and it cited rising costs as doable explanations for the falls. On-line retail gross sales additionally declined.

Retail gross sales volumes are 2.2% above their stage in February 2020 however they’re a great distance behind the place they’d have been if development had continued alongside its pre-pandemic development, Keith Church, an economist from threat consultancy 4most, mentioned.

The pound fell beneath $1.30 for the primary time since November 2020 after the info.

Earlier this month, Tesco, Britain’s greatest retailer, warned of a drop in income as excessive inflation squeezes the grocery store group and its prospects.

A intently watched enterprise survey from S&P World, due at 0830 GMT, will present extra clues on whether or not the collapse in shopper confidence is hurting enterprise exercise.

(Reporting by Andy Bruce Enhancing by William Schomberg and Toby Chopra)

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