Scroll to Top
UK

UK retail sales fall sharply as consumers feel the hit of Brexit vote inflation

By dailymail / Published on Thursday, 15 Jun 2017 19:03 PM / No Comments


The ONS said retail sales in the three months to May rose by 0.6 percent, stronger than a rise of 0.2 percent in the three months to April.

The jump in sales in April was revised higher by the ONS on Thursday.

Compared with a year earlier, retail sales rose 0.9 percent compared with economists’ forecasts for a 1.7 percent rise, the joint weakest increase since April 2013.

British retailer DFS Furniture warned earlier on Thursday that it would not meet profit expectations for the current year, blaming a dip in demand on customer uncertainty about the economic outlook and about the election.

Earlier this week, credit card firm Visa said British consumers cut their spending for the first time in nearly four years in May. Other measures of spending published before Thursday’s ONS data had suggested a slowdown in spending too.

The retail price deflator – a gauge of inflation in stores – edged up to 3.2 percent.

Consumer spending is typically the biggest driver of British economic growth.

The Bank of England said last month it expected most of the shortfall in consumer demand this year to be offset by stronger exports and business investment, but many private-sector forecasters are doubtful.

The BoE is expected to keep interest rates on hold later on Thursday as it focuses more on the weakness in pay growth than the rise in inflation, which it hopes will prove to be a short-lived reaction to the fall in the value of the pound.

Follow CNBC International on Twitter and Facebook.