Caijing Macro: The strong start of UK retailers in 2025 is expected to be difficult to sustain.

Ashley Webb from Capital Economics said in a report that the strong start to the year for British retailers is unlikely to be sustainable. Retail sales unexpectedly rose by 0.7% month-on-month in March, meaning first-quarter sales increased by 1.6%. Webb stated that this growth was driven by a 6.1% surge in fuel sales, as rising prices prompted drivers to stock up. However, with rising unemployment and inflation rates, consumer confidence is expected to further decline in the coming months, indicating that retail sales growth will stagnate. Webb noted that consumer confidence in April hit its lowest level since October 2023, which is consistent with a 2.0% month-on-month decrease in retail sales and a drop in the year-on-year growth rate from 1.7% in March to around 0.0% in April.