UK retail sales fell in April, with higher prices and poor weather blamed for keeping shoppers away.

The Office for National Statistics (ONS) said today that retail sales volumes were down 1.3% compared with March and the amount spent in the retail sector also decreased by 1.3%. Sales of food fell by 4.1%, the biggest monthly decline since May 2011.

Compared against April 2012, retail sales volumes last month were 0.5% higher but this was less than expected. The amount spent increased by 1.3%.

As with the monthly comparison, the greatest source of downward pressure came from the food sector, where the quantity of goods bought decreased by 3.8% and the amount spent was 0.2% lower year-on-year.

Consumers continued to turn to the Internet, with the average weekly spending online in April 2013 amounting to GBP571.7m which is an increase of 13.2% compared with April 2012. According to the ONS the amount spent online accounted for 10.0% of all retail spending excluding automotive fuel.

The British Retail Consortium (BRC) took an optimistic view of the April retail sales figures, saying that they are better than they look.

“April this year didn’t benefit from an Easter boost as in 2012, so sales look weak by comparison, especially for food which had its worst ever performance. The ONS figures actually suggest that April was broadly in line with March, if you take out the distorting effect of Easter timings,” commented Helen Dickinson, BRC director general.

Dickinson also highlighted the fact that the changeable weather this April meant that it was a mixed month for retailers. As temperatures rose towards the end of the month, demand for new-season clothing and footwear lifted following a slow sales due to the prolonged wintry weather.

The British Chambers of Commerce found little to cheer about in the ONS figures. Its chief economist, David Kern, said that the fall in retail sales volumes is disappointing and indicates that UK economic growth in the second quarter will be lower than the 0.5% growth envisaged in last week’s Bank of England Inflation Report.

The outlook for the UK economy is brighter, outgoing Bank of England Governor Sir Mervyn King said today.

Presenting his last quarterly inflation report as head of the central bank, Sir Mervyn stated that the latest projections are for growth to be a little stronger than expected three months ago, and inflation to be a little weaker.

“That’s the first time I’ve been able to say that since before the financial crisis,” he added.

The governor pointed out, however, that there was still some way to go. “This hasn’t been a typical recession and it won’t be a typical recovery,” he commented.

Inflation in two years’ time is now expected to be around the 2% target, the Bank of England said in today’s report. This is down from the 2.3% forecast in February.

Following the better than expected 0.3% growth in the economy in the first quarter of 2013, GDP growth is predicted to strengthen to 0.5% in the second quarter. But with the UK experiencing its slowest economic recovery in decades, the Bank forecast that GDP was likely to remain below its pre-crisis level for another year or so, the Guardian reported.

There were no indications that the central bank was planning to resume its quantitative easing programme, a policy it described as “highly stimulatory”.

Commenting on the Bank of England’s inflation report, David Kern, chief economist at the British Chambers of Commerce, said that the picture it paints is too optimistic. “We accept that growth is likely to remain positive, but believe that the speed of the recovery will be somewhat slower than the governor indicated,” he said.

Mark Carney will take over as governor of the Bank of England in July.

Confirming that the UK’s economic recovery is still fragile, separate figures released today by the Office for National Statistics revealed an increase in unemployment in the first three months of the year, to 2.52 million.

However, City economists quoted by the Independent said that the unofficial one-month figures point to a sharp drop in unemployment in March. Moreover, the official claimant count shows that the number of people claiming Jobseeker’s Allowance fell by 7,300 in April to 1.52 million.

Demand in the UK residential property market reached its highest level in more than three years last month, a new survey shows.

The Royal Institution of Chartered Surveyors (RICS) said yesterday that the government’s Help to Buy scheme had started to make an impact on the housing market in April.

In its latest Residential Market Survey, the organisation found that 25% more chartered surveyors reported seeing an increase in demand for property rather than a decrease. This is up significantly from the difference of 13% registered in March.

According to the RICS this upturn strongly suggests that, alongside the existing Funding for Lending scheme, Help to Buy is attracting interest even if the mortgage guarantee element of the product is not due to come into effect until next year.

As well as the higher level of demand in the market, surveyors also reported that supply increased in April, albeit more modestly.

Overall, with not enough housing to meet increased demand, prices are rising and the monthly survey by the RICS recorded its first positive reading for house prices since June 2010.

Demand for rented property is also continuing to outstrip supply, the RICS pointed out. A balance of 18% more surveyors expect rental prices to rise rather than fall, although most anticipate rents rising by less than 2% over the next year. One of the reasons for this moderation in rent increases may be the healthier housing market and increased access to mortgage lending, the RICS suggested.

A separate survey released today also showed increased activity in the housing market. The Council of Mortgage Lenders (CML) said that the number of first-time buyers went up by 20% in March.

This trend, combined with a small rise in the number of home movers, contributed to a monthly jump in house purchase lending.

Slovenia’s government plans to dispose of 15 state-owned companies, including its second largest bank Nova KBM, largest telecommunications group Telekom Slovenia, flag carrier Adria Airways and Ljubljana Airport, as part of its efforts to avoid international bailout, Reuters cited finance minister Uros Cufer as saying.

The programme, which also includes an increase in value added tax (VAT) to 22% from 20% as of 1 July, would allow Slovenia to remain a completely sovereign state, Cufer said.

The government gave no details about the timeframe for the privatisations, or the price it targets for the companies it plans to sell, but said it would not retain blocking interests in them.

The plan is to be sent to the European Commission on Friday, Reuters said. The news agency cited a spokesman for the EU Economic and Monetary Affairs Commissioner Olli Rehn as saying that the EC will look into the plan and give its response on 29 May.

Prime Minister Alenka Bratusek expressed confidence that the proposed package would be sufficient to prevent Slovenia from being bailed out by the European Union (EU) and the International Monetary Fund (IMF).

In recession since 2011, Slovenia was expected by analysts to be most likely to need help from the EU after Cyprus, the BBC said.

UK retail sales in April were affected by the earlier Easter this year, the British Retail Consortium (BRC) confirmed today.

A new report from the BRC shows that retail sales values in April 2013 were down 2.2% on a like-for-like basis from April 2012 and fell by 0.6% on a total basis, with growth negatively impacted by the fact that Easter fell in April last year but in March this year.

Online sales continued to increase, rising by 8.3% compared to April 2012.

BRC director general Helen Dickinson commented that, excluding the Easter distortion, April was actually a better month than March, especially for non-food sales. The weather had a big influence on buying habits, with the prolonged cold meaning that shoppers had little interest in new season clothing and footwear ranges early in the month but that changed when the weather warmed up.

Consumers’ willingness to spend remains volatile. “A convincing trend towards revival is hard to spot and competitive pricing is still critical to generating sales, despite the effect on margins and on retailers’ ability to invest in offering customers new ways to shop,” Dickinson added.

David McCorquodale, head of retail at consultancy firm KPMG, highlighted the fact that the three-month weighted average, which smooths out the effect of the timing of Easter, shows a total increase in retail sales of 2.6%. This indicates that the health of the retail sector is holding up and may be on a positive trajectory, although it is yet to be seen at what margins these sales are being achieved and what is the cost of fulfilling the online demand, he said.

Taking into account Shop Price Index inflation, total retail sales were down 1.0% in real terms in April while the three-month average shows growth of 1.6%.

Another insight into the state of the UK retail sector came this morning with the release of a trading update from shopping centres operator Intu Properties. The company, which owns or part-owns 15 shopping centres across the country, including Lakeside and Manchester’s Trafford Centre, said that the retail environment remains “difficult” and retailers continue to be cautious about entering into store commitments.

In the first quarter of 2013 footfall in Intu’s shopping centres was down 1% compared to a year earlier, although the company noted that this still represents a significant out-performance of Experian’s measure of UK national retail footfall, which declined by 4% as a result of the weak economic background.

Although shop failures, lease expiries and tenant caution over new store commitments are likely to continue to affect short term earnings, Intu said that it is maximising the opportunities available in the changing marketplace, for example by introducing free high-speed Wi-Fi, a new mobile website and click and collect services.

New car registrations in the UK increased again last month, rising by almost 15% compared to the same period last year.

The Society of Motor Manufacturers and Traders (SMMT) noted that there were more sales days this April than a year earlier, but said that the new car market is continuing to perform “surprisingly strongly.”

There were 163,357 new cars registered in April 2013, up 14.8% year-on-year and the best April performance since 2008.

In fact, the growth of the market in April was the strongest seen in 14 months.

SMMT interim chief executive Mike Baunton commented that the UK is continuing to perform ahead of the troubled eurozone, with consumer confidence, regular purchase cycles, attractive finance deals and wider market factors making new car buying favourable for motorists.

Last month’s growth was driven by the private sector, where volumes were up 32.3% compared to a year ago. Demand increased for cars of all fuel types, particularly petrol-fuelled cars. This is down to greater demand for small cars among private buyers.

According to the SMMT the Supermini segment remains the largest segment in the UK market while the Mini segment continues to post the best growth. The best selling model in April and in the year to date was the Ford Fiesta.

In addition to the strength in the market registered in April, the longer term trends are also positive.

In the first four months of 2013 new car registrations grew by 8.9% or more than 60,000 units compared to the same period last year, to 768,555 units. Over the past 12 months registrations rose by more than 150,000 units to 2.107 million units, although the SMMT pointed out that the 12-month total is still 12.3% short of the 2007 full-year total.

Looking ahead, the organisation expects new car registrations for the whole of 2013 to reach 2.106 million units, a 3% rise on 2012 volumes. This total is still some 300,000 units below the pre-recession market. Next year the number of registrations is predicted to grow further, to 2.123 million units.

Corporate insolvencies in England and Wales have continued to fall, despite several high-profile retail failures in recent months.

Official statistics released today by the Insolvency Service show that the number of compulsory liquidations and creditors’ voluntary liquidations in England and Wales in the first quarter of 2013 was 15.8% lower than in the same quarter a year ago. The number fell by 5.3% from the previous quarter.

At the same time, the number of administrations decreased by 28.5%, with 557 businesses failing during the first three months of the year compared with 779 in the same period of 2012. There was also a drop in the number of receiverships (down 29.8%) and company voluntary arrangements (down 18.9%).

Mike Jervis, business recovery partner at PwC, commented that corporate failures at such low levels, particularly of administrations, have not been seen since 2005 and the figures suggest that stakeholders are supportive of companies in distress and are willing to consider non-insolvency solutions.

The numbers are particularly striking in light of the fact that the total number of retail insolvencies fell by 47% between the first quarter of 2012 and the same period this year.

Meanwhile personal insolvencies have fallen to the lowest level for five years, the Insolvency Service report reveals. Just over 25,000 people in England and Wales were granted insolvency in the first three months of 2013, representing a fall of 12.9% on the corresponding quarter last year.

According to Matthew Chadwick of accountancy firm BDO, quoted by the BBC, the figures “continue to defy logic.” He said that it is hard to explain the lowest level of personal insolvencies since 2008 when this is set against the economic backdrop of limited job creation, heightened unemployment, raised inflation and low wage growth.

The Financial Conduct Authority (FCA) has warned homeowners with interest-only mortgages that they need to take control of their mortgage repayment planning.

Research carried out by the FCA, the UK’s new financial services industry regulator, shows that many people with this type of borrowing are expected to be in a good position to repay the mortgage when it is due for repayment. However, many others, particularly those whose mortgage is due to be repaid before 2020, need to consider whether they will be able to repay the outstanding amount and take action accordingly.

The Council of Mortgage Lenders and the Building Societies Association have agreed with the FCA to make sure that lenders get in contact with their borrowers in order to prompt them into checking that their plan for repayment is on track and considering the options available to them.

According to the FCA, this type of pre-emptive work is an example of the way the new regulator intends to act in the future, endeavouring to spot potential problem areas and prevent them from developing into bigger issues.

By acting now, in collaboration with the mortgage sector, the FCA is aiming to prevent interest-only borrowers defaulting on their loans in the future.

Over the next 30 years, some 2.6 million interest-only mortgages in the UK will become due for repayment. The FCA’s research indicates that around 90% of borrowers have a repayment strategy, such as a mortgage linked endowment policy. Despite this, just under half of all interest-only borrowers are modelled as likely to have a shortfall.

The FCA expressed concern that some borrowers are underestimating the problem, wrongly believing that they will have enough money to pay off their loan.

Among those who are set to repay their loan before 2020, a third of the shortfalls are expected to be over GBP50,000. Lenders will be contacting this group of borrowers first, if they have not done so already, because these are the people who have the least amount of time to find a solution.

The FCA said it believes that with careful planning, consideration and engagement with their lender, many interest-only borrowers – even those with loans maturing by 2020 – should be able to find a viable way to pay off their mortgage if they take control of the matter now.

The UK manufacturing sector is showing signs of stabilising, according to a new report released today.

The Manufacturing Purchasing Managers’ Index (PMI), compiled by the Chartered Institute of Purchasing & Supply (CIPS) and financial information services firm Markit, reveals that the index rose to 49.8 in April, up from 48.6 in March but remaining just below the 50 mark that separates contraction from growth.

April’s PMI figure is a further increase from February’s four-month low, reflecting higher production levels and new orders after two months of contraction.

Rob Dobson, senior economist at Markit, noted that manufacturers were still reporting weakness in domestic markets but there was a solid improvement in new export orders last month resulting from increased sales to customers in North America and Australia, as well as growing markets in Latin America and the Middle East.

In fact, the level of new export work received by UK manufacturers rose for the first time in more than a year and at the fastest pace since July 2011. This made up for lacklustre demand in Europe.

Manufacturing accounts for about 10.5% of the UK’s GDP and the sector acted as a drag on the economy in the first quarter of the year. With forward-looking indicators such as new orders and the demand-to-inventory ratio moving higher, “the sector should at least be less of a drag on broader GDP growth in the second quarter,” Dobson commented.

Stephen Gifford, director of economics at the CBI, said that the Markit/CIPS figures are in line with the business group’s own survey, showing signs of stabilisation in the manufacturing sector, with companies expecting business to pick up over the next few months.

Pointing out that boosting manufacturing exports is essential to the strength of the sector, he added that the CBI wants the government to introduce a tax incentive for small and medium-sized exporters in order to help them enter new markets.