UK retail sales drop well below expectations in June
British retail sales dropped by 1.2% in June after a 2.9% jump in May and missed forecast for 0.6% fall.
Annualized figure showed that retail sales fell by 0.2% in 12 months to June, after May’s 1.7% rise and fell below forecast for 0.2% increase.
Unseasonably cooler weather, which put off shoppers, was mainly to be blamed for unexpectedly strong fall in retail sales last month
While wages are now rising more quickly than inflation, British shoppers have been squeezed by high inflation over the past two years, which just recently slowed and hit the Bank of England’s 2% target last month.
However, underlying inflation pressures have diminished hopes among investors for an interest rate cut on the BoE’s next scheduled monetary policy meeting on Aug 1.
Analysts noted that shoppers were still reluctant to spend despite improving conditions by the fall in inflation, wage increases and lower social security contributions.
The Office for National Statistic’s report pointed to fall in sales volumes in the of most sectors, except for automotive fuels with the strongest drop seen in categories more sensitive to weather changes such as clothing.
A separate report, released on Friday, showed consumer sentiment in Britain inched up in July to its highest level since September 2021.