British retail sales fell less sharply than expected in May as retailers ramped up prices at their sharpest rate since 1992, and are forecast to rise next month, a survey indicated today.
The Confederation of British Industry (CBI) said its distributive trade survey's reported sales balance rose to -14 this month from -26 in April.
Retailers expect a sales balance of +6 in June but policymakers are likely to be dismayed by further signs of rising price pressures when inflation is already running a point above the central bank's 2 per cent target.
The quarterly reported price balance rose to +56 in May from +50 in February. That was the highest since May 1992 while the quarterly price expectations balance rose to +52 from +48 in February, the highest rate since August 1992.
"The high street is facing another testing month as consumer spending power has been hit by the rising cost of fuel and food as well as any credit crunch worries," said Ian McCafferty, economic adviser to the CBI.
"It is encouraging that retailers can see some recovery in sales next month but they are not optimistic about the business outlook and retail conditions are likely to remain tough."
Much warmer than usual weather appeared to have boosted sales of food and clothes.