Strong UK retail sales suggest recovery has momentum

April's strong retail sales figures offer another reason to think that the economic recovery is not about to fizzle out. The volume of retail sales (including petrol) rose by a monthly 1.2% in April, much stronger than the consensus expectation of a 0.4% rise, and more than reversing March's 0.7% fall (which itself was revised weaker from a previous estimate of a 0.5% fall).

Admittedly, clothing sales were particularly strong, as consumers took advantage of the good weather to build their summer wardrobes. This means that clothing sales may weaken over the coming months. Nonetheless, the rise in spending in April was broad-based, and the fundamental drivers of spending remain robust. Indeed, real wages are rising strongly, consumer confidence is high, credit is cheap and households are yet to spend all of their windfall from lower energy and food prices. With spending off the high street building pace as well, overall consumer spending is expected to rise by a robust 3% or so this year - the strongest growth since 2005, says Capital Economics.