Retail sales drop is a blip, say City analysts

Consumers might be more cautious about spending windfall gains if the boost to their real incomes caused by the fall in inflation was thought to be temporary

The timing could hardly have been worse for the government. An economy that was fairly humming along in the last few months of 2014 has come off the boil. Industrial production has faltered. Construction output is down. And the latest news from the high street is that spending was down in March.

The City was quick to play down the 0.5% fall in retail sales. Analysts said it was just a blip, pointing out that excluding a big drop in business at petrol stations, there was a small 0.2% rise in sales last month.