RETAIL SALES DROP AS CONSUMER SPENDING FALLS

Retail sales fell unexpectedly by 1.4 per cent last month, as consumers reduced their spending due to the increase in living costs, according to figures published by the Office for National Statistics (ONS). The ONS said the fall was largely down to a decrease in demand for online purchases (Sky News).

Darren Morgan, ONS director of economic statistics, said: "Fuel sales also fell substantially, with evidence suggesting some people reduced non-essential journeys, following record high petrol prices, while food sales continued to fall, dropping for the fifth consecutive month." (BBC News).

Separate data from GfK found consumer confidence is falling, with people expressing more concern about the economic outlook than in the aftermath of the 2008 financial crisis (The Times).

BANK OF ENGLAND WARNS OF RISK OF PERSISTENT INFLATION

Speaking in Washington yesterday, the governor of the Bank of England (BoE) said he was concerned about the risks of persistent inflation from a strong labour market, even though he expects economic activity to slow over the rest of the year (Financial Times).

Separately, Catherine Mann, who sits on the BoE’s monetary policy committee, said interest rates could rise again in May to tackle high levels of inflation (The Guardian). She added that it was important for the Bank to calm inflation expectations, which were likely to drive demands for higher wages, pushing inflation even higher.

NEWS IN BRIEF

A review by the Financial Conduct Authority has found that some improvements are needed in financial crime controls at some challenger banks (Financial Times).

Prime minister Boris Johnson says he wants a free trade deal with India by the end of this year, as negotiations could see the UK grant more visas to Indian workers (BBC News).

Business groups and councils have warned that the government is imposing unrealistic goals on English cities to meet home building targets (Financial Times).

Prospective homebuyers are now paying more attention to a property’s EPC rating and are willing to pay more for homes with heat pumps already installed, according to analysis by the estate agents Savills (The Guardian).