UK Retail Sales Fall Far Short of Expectations in June
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British retail sales dropped by 1.2% in June, following a 2.9% rise in May, missing the forecasted 0.6% decline. Annually, retail sales fell by 0.2% in the 12 months to June, after a 1.7% increase in May, and fell below the forecasted 0.2% rise.
Unseasonably cooler weather, which deterred shoppers, was primarily blamed for the unexpectedly sharp decline in retail sales last month.
Although wages are now rising faster than inflation, British shoppers have been squeezed by high inflation over the past two years, which only recently slowed to meet the Bank of England’s 2% target last month. However, underlying inflation pressures have dampened investors’ hopes for an interest rate cut at the BoE’s next scheduled monetary policy meeting on August 1.
Analysts noted that shoppers were still hesitant to spend despite improving conditions due to falling inflation, wage increases, and lower social security contributions.
The Office for National Statistics’ report indicated a decline in sales volumes across most sectors, except for automotive fuels, with the steepest drops in weather-sensitive categories like clothing.
A separate report released on Friday showed consumer sentiment in Britain inched up in July to its highest level since September 2021
