TD Securities analysts anticipate a modest 0.1% month-on-month increase in UK retail sales volumes for March, slightly above the market consensus of 0.0%. This follows a -0.4% m/m decline in February, which analysts attribute to a correction after January's discount-driven surge rather than a sign of weakening underlying demand. The report notes that online and non-store retailing are expected to provide mild support, while food and supermarket sales will likely remain a drag. Weather-related challenges to household goods sales are expected to ease with warmer and less rainy conditions in March. The overall rebound in retail sales is described as tentative, reflecting subdued but stabilizing consumer momentum in the aftermath of the onset of the Middle East conflict [1].
UK private sector business activity regained momentum in April, with both manufacturing and services PMIs showing moderate upturns. Manufacturing PMI rebounded to 53.6 (TDS: 50.5; market: 50.3; prior: 51.0), driven by firms advancing orders and building safety stocks amid rising raw material prices and supply chain concerns. The services sector PMI rose to 52.0 (TDS/market: 50.0; prior: 50.5), supported by technology investments and new marketing initiatives, despite ongoing weakness in some areas [1].
However, the report highlights several risks to the sustainability of this momentum. Sharply accelerating input cost inflation—particularly from raw materials and fuel—along with persistent global uncertainty and higher transportation costs, are collectively dampening demand and business optimism. TD Securities warns that the current uptick in activity may not be sustainable if geopolitical conflicts persist [1].
CONCLUSION
UK retail sales and PMIs indicate a fragile recovery, with modest gains in March and April offset by rising input costs and ongoing geopolitical risks. While some sectors show improvement, analysts caution that the momentum may not be durable if current headwinds continue.