Retail sales bounced back in a warmer second quarter of the year, raising hopes the resilience of the British consumer will continue to fuel UK economic growth.
Sales rose by 0.6 per cent in June in terms of the volume bought, with a quarterly sales increase of 1.5 per cent, the Office for National Statistics (ONS) revealed today, reports CityAM.
The first quarter of the year saw the biggest quarterly decline in retail sales since 2010, as higher inflation weighed on consumer spending, but overall sales volumes have now recovered to around the same point at the start of the year.
Anecdotal evidence suggested warmer weather contributed to the increase, the ONS said.
Kate Davies, ONS senior statistician said: “Today’s retail sales figures show overall growth. A particularly warm June seems to have prompted strong sales in clothing, which has compensated for a decline in food and fuel sales for the month.”
While retail sales data tend to be quite volatile, particularly on their first estimation, the figures nevertheless seem to indicate consumers are starting to put aside uncertainty.
Richard Lim, chief executive of consultancy Retail Economics, said: “Any anxiety over the general election, Brexit or the squeeze on disposable incomes appears to have been put to one side for the moment.
Meanwhile, the annual rate of increase of average store prices slowed to 2.7 per cent in June, down from 3.2 per cent in May, suggesting the inflationary pressure from sterling’s devaluation may have peaked.
Consumer price inflation rose as high as 2.9 per cent in May, but has since moderated to 2.6 per cent in June, with economists split as to whether prices will continue their rapid rate of increase.
However, inflation is still expected to stay well above wage growth for some time. Lim said: “We still expect pressures facing households to intensify in the coming months. Real earnings are expected to remain in negative territory for the remainder of the year. Retailers will be hoping shoppers remain resilient in the face of further uncertainty.”
