UK retail sales fall more than expected
UK retail sales fell more than twice as expected in May, new data has shown, deepening concerns over the health of the high street.
Sales fell 1.4 per cent in May compared with April, against economists’ expectations for an 0.6 per cent increase.
The fall reversed April’s 1.1 per cent rise as rising job insecurity, poor pay growth and high inflation caused shoppers to stay at home.
“The decline is not really a surprise given the strength of the data in the previous month and the downbeat mood among households,” said Markit chief economist Chris Williamson.
The data confirms trading updates from supermarkets Tesco and Sainsbury this week showing shoppers avoiding non-food items as high fuel prices reduced their food spend each week.
“Spending is being diverted away from non-essential items so that households can maintain their spending on necessities such as food, which have generally risen in price. Household goods and clothing sales fell especially sharply in May,” Williamson added.
He said sales growth had been flat since last November.
IHS Global Insight chief economist Howard Archer said the data “does not bode at all well for GDP growth in the second quarter.”