LONDON (Reuters) -British retail sales surged last month following a dip caused by heavy rain in April, according to official figures released on Friday. This uptick provides a slight lift for Prime Minister Rishi Sunak ahead of the July 4 election.
Sales volumes rose 2.9% in May, up from a revised 1.8% fall in April, the Office for National Statistics said.
Economists polled by Reuters had on average forecast sales volumes would increase by 1.5% in May.
In comparison to last year, sales volumes in May rose by 1.3%, following a revised 2.3% decline in April. However, they still lagged 0.5% below the pre-pandemic level of February 2020.
The ONS said yearly sales growth might also be distorted by an extra public holiday in May 2023 to mark King Charles’ coronation.
Lisa Hooker, a consumer markets specialist at PwC, said May’s sales growth was less strong than it looked at first glance, once the extra trading day, a cut in employee payroll taxes and a rise in the minimum wage were taken into account.
“We would have expected a larger improvement in sales volumes,” she said.
British shoppers have been squeezed by high inflation which only returned to the BoE’s 2% target last month after exceeding it for nearly three years.
Average wages are currently increasing at a faster rate than inflation. Consumer sentiment in June reached its highest level since November 2021, per Britain’s longstanding consumer confidence survey on Friday.
Despite the UK retail sales rebound, the landscape remains cautious amidst fluctuating consumer sentiment.
Looking ahead, the trajectory of UK retail sales rebound in May suggests a cautiously optimistic outlook.
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