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Retail

UK Shoppers Boost Spending Again Despite Inflation Squeeze

By Reuters
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UK Shoppers Boost Spending Again Despite Inflation Squeeze

British retail sales unexpectedly rose in May from April, suggesting most consumers were coping with high inflation's squeeze on their spending power, according to official figures published on Friday.

The Office for National Statistics said retail sales volumes in the UK rose by 0.3% on the month, following a rise of 0.5% in April and defying forecasts in a Reuters poll of economists for a fall of 0.2%.

"Retail sales grew a little in May, with online shops doing particularly well selling outdoor goods and summer clothes, as the sun began to shine," ONS senior statistician Heather Bovill said.

"May also saw a return to growth for fuel sales after a dip in April," she said, adding the good weather boosted sales at garden centres and DIY stores as well as clothing stores.

Food Sales Fall

However, food sales fell by 0.5% from April as supermarket prices continued to rise and many people ordered takeaways and drinking out more over bank holidays during May including a one-off holiday to mark the coronation of King Charles.

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Retail sales volumes in May were 2.1% lower than a year earlier.

The Reuters poll had pointed to a fall of 2.6% in sales volumes on an annual basis.

Britain's persistently high inflation has hit household spending power. The pace of price growth held at 8.7% in May according to data published earlier this week, defying forecasts for a slowdown.

The Bank of England on Thursday raised interest rates for the 13th time in a row to 5.0%, their highest since 2008.

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