What's going on?

Data out on Friday showed British retail sales had a spring in their step in April.

What does this mean?

Inflation might not have been showing much chill last month, but that didn�t stop gung-ho British shoppers splashing out. The tidy little splurge was probably partly down to higher welfare payments and a juiced-up minimum wage � but the long-awaited advent of sunnier weather might�ve triggered a national wardrobe update too. Still, it wasn�t just linens and parasols that folk were buying: sales rose in every category except for fuel and household goods. All in all, then, the volume of goods sold online and in stores increased 0.5% from March � almost double the uptick economists were expecting, and a welcome return to growth after a 1.2% dropoff in March.�

Why should I care?

Zooming in: May may make good.
British spending seems to be hitting its stride: the three-month period leading up to April recorded the highest sales volume increase since August 2021 � and that momentum might keep on rolling. After all, May boasted three bank holidays and some warmer weather, giving shoppers ample opportunity to splurge. Add in the fact that consumer confidence climbed to an annual high, and there�s a good chance this month�s figures will keep the upward trend going. And that�s not to mention the lower energy price cap slated for July, which will leave Brits with a little more cash to splash this summer too.

The bigger picture: Wage war.
The British economy is holding out pretty well on the whole, but rising wages have been a key factor in its resilience, and that�s a problem. See, that juicy pay is sparking more fiery inflation �� the opposite of what the Bank of England wants. So with some extra interest rate hikes on the cards, the economy�s true mettle could soon be put to the test.