UK retail sales surge in May

British annual retail sales growth unexpectedly picked up speed in May after a bumper performance in April, boosted by a big increase in clothing sales from the month before, official figures showed on Thursday.

Shoppers showed no sign of holding back in the run up to June’s referendum on European Union membership, which had previously knocked some measures of household sentiment.

Retail sales volumes rose 6.0 per cent in May, the biggest annual rise since September, the Office for National Statistics said, above all forecasts in a Reuters poll of economists.

April’s retail sales growth was revised up to 5.2 per cent from 4.3 per cent, which the ONS said reflected an unusually high amount of data received late from stores. Compared with a month earlier, sales volumes were up 0.9 per cent, much less of a slowdown than economists had expected after monthly growth of 1.9 per cent in April, which also reflected an upward revision.

Much of May’s strength was down to a big rebound in clothing sales, which unlike other sectors had performed relatively weakly in April when colder than normal weather dampened demand.

In May, clothing sales jumped by 4.3 per cent on the month - the biggest rise in over two years - boosted by better weather. Looking at sales in the three months to May - which smooths out some volatility in the data - volumes were up 1.5 per cent on the previous three months, the biggest rise since November 2015.

Consumer spending has been a major driver of Britain’s economic expansion over the past three years, but household confidence has slipped to its weakest since late 2014 in the run-up to a June 23rd referendum on European Union membership.

Reuters