Eurozone retail sales up

PanARMENIAN.Net - Retail sales in the 17 countries that use the euro rose in January for the first time in six months, official figures showed March 3, in a tentative sign that consumers are finally confident enough to pick up spending.

Eurostat, the EU's statistics office, said retail sales increased by 0.4 percent on the month, marginally ahead of analysts' expectations for a 0.3 percent increase.

The rise was the first since July and made up for the 0.4 percent decline in December, when heavy snow across Europe prevented retailers enjoying the sort of Christmas boom they had been hoping for.

For the recovery to become more self-sustaining, analysts say that consumers will have to start spending more on goods and services. So far, the economic recovery from recession in the eurozone has been based on a big rebound in the industrial sector, with Germany's exporters doing particularly well.

"If the eurozone is to see decent growth in 2011, it really needs consumers to increasingly step up to the plate," said Howard Archer, chief European economist at IHS Global Insight.

The data are unlikely to alter expectations that the European Central Bank will be keeping its main interest rate unchanged at the record low of 1 percent at the conclusion of its monthly meeting later today.

All eyes will be on whether ECB president Jean-Claude Trichet sounds a more hawkish tone on inflation, which rose to 2.4 percent in the year to February largely because of higher energy and food costs. If he does, then markets may well move to price in an earlier than anticipated interest rate increase. At the moment, the markets expect the first rate hike in the latter part of 2011, AP reports.