Britons Return to the Stores After Johnson Election Victory

(Bloomberg) -- U.K. retail sales jumped the most in almost two years in January, ending the worst run for British stores on record and adding to signs of an economic rebound after the December election created a Brexit breakthrough.

Sales excluding auto fuel rose 1.6% from December, the biggest increase since May 2018. Economists were expecting a rise of 0.8%. Sales including fuel rose 0.9%, the most since March.

The figures from the Office for National Statistics add to evidence of a pickup in consumer confidence since Boris Johnson’s election win removed some of the uncertainty hanging over the economy. The pound was little changed as of 10:08 a.m. in London.

Sales excluding fuel had fallen or stagnated in each of the previous five months -- the longest run without growth since at least 1996 -- with Black Friday price discounts failing to lift spending in December. Stores from Marks & Spencer Group Plc to John Lewis Partnership Plc have reported challenging trading conditions.

The surge last month adds to the case for the Bank of England to refrain from cutting interest rates. Figures this week show the labor market remains tight and inflation accelerated more than forecast last month.

Sales rose in every retail category bar household goods and auto fuel. Petrol stations saw sales drop almost 6% as gasoline and diesel prices rose. Food sales rose 1.7% and non-food stores sold 1.3% more, with clothing and footwear posting the biggest gain amid discounting. Non-store sales, including online operators, climbed 2.5%.

Sales fell 0.8% in the three months through January, a period that covers Black Friday, Christmas and the New Year shopping periods.

To contact the reporters on this story: Jill Ward in London at jward98@bloomberg.net;Andrew Atkinson in London at a.atkinson@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Andrew Atkinson, Brian Swint

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