20.04.201801:40:00UTC+00U.K. Retail Sales Fell in the 1st Quarter

The volume of retail sales in the UK dropped in March as British shoppers stayed home due to a period of inclement weather nicknamed the 'Beast from the East', weighing on first-quarter economic expansion, official figures showed.

Retail sales declined 1.2 percent compared to previous month, according to data published by the Office for National Statistics. City economists forecast a 0.6 percent drop.

Looking at the quarter as whole, sales dropped by 0.5 percent compared with the final three months of 2017 - the biggest fall since the first quarter of 2017. The ONS said this was likely to trim 0.03 percentage points off first-quarter GDP growth, which other analysts forecast at around 0.3 percent.

The sharp drop in sales was due to a big decline in fuel sales. Petrol sales fell by 7.4 percent compared to February.

Sterling dropped to a one-week low after the data, which caps a week where wages increased more slowly and inflation fell quicker than expected, raising doubts about how far the Bank of England will raise interest rates this year.

The BoE is likely to stick to its view that the labor market is prepared for a pick-up in wages, as unemployment is at a 42-year low, leading to stronger consumer demand later this year as inflation continues to fall.

Britain's economy underperformed its rivals last year as higher inflation - caused by the fall in the pound since June 2016's Brexit vote - hurt the consumers' spending power, though forecasts for a sharp downturn proved too pessimistic.