UK retail sales stronger in May

 

British retail sales grew slightly more than expected in May, official data showed today.

Office for National Statistics (ONS) said sales rose 0.4 per cent on the month, recovering from April's 0.1 per cent fall and marginally outpacing forecasts for a 0.3 per cent gain.

Year-on-year, sales growth eased to 3.9 per cent from 4.2 per cent in April but was still above expectations for a 3.8 per cent gain.

The ONS said underlying growth remained firm, with sales in the three months to May up 4.4 per cent on the year. Analysts said the figures suggested four rises in borrowing costs since August had not yet dented consumer spending and reinforced the view the Bank of England would raise interest rates to 5.75 per cent soon.

There were signs that price pressures are easing in the shopping malls, with the retail sales deflator slowing to 0.5 per cent from April's 8-year high of 1 per cent.

Policymakers have been concerned about companies' growing pricing power as they try to repair profit margins that were squeezed by last year's energy price rise.

All sectors showed an increase in sales last month except textiles, clothing and footwear, which was 2.5 per cent down on the month.