Retail sales were much weaker than expected at the start of the quarter. Following a revised 0.2 percent monthly fall in March, volumes declined a hefty 2.3 percent, more than 2 percentage points more than the market consensus and their worst performance since last December. Annual growth slumped from 0.4 percent to minus 2.7 percent and sales now stand at a 4-month low.

Excluding auto fuel, the picture was much the same with purchases down 2.0 percent versus March and 3.0 percent weaker on the year.

April's monthly drop reflected broad-based losses. Food decreased 0.8 percent and non-food (ex-auto fuel) was down fully 4.1 percent. Within the latter, there were sizeable falls in all of the main categories, notably household goods at minus 5.4 percent, with the only exception being non-specialised stores (up 0.4 percent). Elsewhere, non-store retailing also advanced 1.1 percent but auto fuel was off 4.9 percent.

Today's update was probably biased worse by very wet weather but the underlying position still looks weak. Even so, earlier strength means that the 3-monthly change remains positive at 0.7 percent. The April data probably slightly boost the likelihood of a June rate cut by the BoE but the MPC's focus on inflation still suggests otherwise. The report trims the UK RPI to minus 16 and the RPI-P to minus 31. Economic activity in general is running somewhat behind of market expectations despite the latest upside surprise on consumer prices.

After no change percent in March which missed expectations for a 0.3 percent gain, volume sales in April are expected to slip a monthly 0.1 percent. Annual growth is seen falling by half, to 0.4 from 0.8 percent.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The data include all internet business whose primary function is retailing and also cover internet sales by other British retailers, such as online sales by supermarkets, department stores and catalogue companies. Headline UK retail sales are reported in volume, not cash, terms but are available in both forms. The data are derived from a monthly survey of 5,000 businesses in Great Britain. The sample represents the whole retail sector and includes the 900 largest retailers and a representative panel of smaller businesses, including internet sales. Collectively, all of these businesses cover approximately 90 percent of the retail industry in terms of turnover.

With consumer spending a large part of the economy, market players continually monitor spending patterns. The monthly retail sales report contains sales data in both pounds sterling and volume. UK retail sales data exclude auto sales.

The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps apparel sales are showing exceptional weakness but electronics sales are soaring. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.