Jun 24, 2022 02:15AM ET
By: AnalysisWatch
Retail sales in the United Kingdom fell 0.5% in May, reversing course after rising 0.4% the previous month, according to data from the Office for National Statistics.
The decline was largely due to a slowdown in food retail sales, which fell 1.6% during the month, a sign that inflation concerns may be hurting consumer demand.
Year-on-year, retail sales were also down 4.7%.
According to the ONS, sluggish demand in food retail was partially offset by an increase in fuel sales, which rose 1.1%. The ONS added that this increase may be related in part to an increase in hybrid work and a slowdown in home-only work.
Overall, the decline in retail sales in May was smaller than expected. Analysts had expected a 0.7% month-over-month decline. Total sales were also 2.6% above pre-pandemic volumes in February 2020.
The data comes at a time of growing concern in the U.K. that rising prices could lead to a broader cost-of-living crisis. U.K. inflation hit a new 40-year high of 9.1% in May, and the Bank of England has predicted that figure could rise above 11% later this year. The BoE has vigorously sought to contain these higher costs by raising interest rates by 25 basis points at its last meeting and hinting at further increases in the future.
Overall, however, the decline in retail sales was less than expected. Analysts had expected a decline of 0.7%.
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