British retail sales sank in March as shoppers tightened their belts in the face of a growing cost-of-living crisis, official data showed on Friday.

Total sales volumes dropped 1.4 per cent last month after a drop of 0.5 per cent in February, the Office for National Statistics (ONS) said in a statement. However, overall sales held above their pre-pandemic level.

“Retail sales fell back notably in March with rises in the cost of living hitting consumers’ spending,” said ONS economic statistics head Darren Morgan. “Online sales were hit particularly hard due to lower levels of discretionary spending.”

Motor fuel sales fell “substantially” as some people curbed non-essential journeys in the face of surging prices at the petrol pumps, he added.

Food sales also slid for the fifth consecutive month.

Britain’s annual inflation rate is at its highest level in three decades, largely on sky-high energy prices.

Costs are surging worldwide after economies reopened from COVID lockdowns and on fallout from the war in Ukraine.

British households faced another sharp squeeze on living costs this month after the government ramped up tax on UK workers and businesses.

British households faced another sharp squeeze on living costs this month after the government ramped up tax on UK workers and businesses

Sharp price rises are forcing central banks to hike interest rates, in turn curbing recovery from the pandemic. The Bank of England in March lifted its key rate to 0.75 per cent, its third increase in a row.

The BoE is seeking to tackle high inflation but avoid recession, Governor Andrew Bailey said Thursday. “We are in a period of unprecedentedly large shocks,” Bailey noted.“We are walking a very tight line between inflation and the risk that we could create a recession. Real income shock will cause slowdown in growth.”

UK inflation spiked to 7.0 per cent last month – far above the BoE’s official 2.0 per cent target – eroding the purchasing power of wages.