Royal wedding and warm weather boost May retail figures | Business

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Better weather brought some much-needed respite to Britain’s struggling retail sector last month as the hottest May on record brought consumers flocking back to the high street.

The volume of goods sold in shops and online was 1.3% up on April – comfortably beating predictions in the financial markets of a 0.5% increase.

The Office for National Statistics said feedback from retailers suggested that a hot, dry spell and royal wedding celebrations boosted spending in supermarkets and household goods stores during the month.

Annual growth in retail sales picked up sharply from 1.4% to 1.9%, although the ONS said that was partly due to a weak month for consumer spending in May 2017.

In the three months to May – a better guide to the trend than one month’s data – retail sales volumes rose by 0.9%. The latest three-month period includes both the weakness caused by the “beast from the east” cold snap and the more recent bounce back in consumer spending.

Samuel Tombs, of PantheonMacro, said: “The jump in retail sales in May has all the hallmarks of a weather-related blip, rather than a sustainable pick-up in spending. Overall growth was boosted by sharp increases in sales of clothing, sporting goods and garden items, up 1.7%, 3.3% and 6.2% month-to-month, respectively.

“Average temperatures were 1.8 degrees above their 1970-to-2016 May average, persuading households to purchase items that they forewent in February and March when the weather was unusually cold.”

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Ruth Gregory, UK analyst at Capital Economics, said that even if retail sales were to fall by around 1% in June, they would still rise by 1.8% over the quarter, the largest quarterly gain since early 2016 and a vast improvement on the 0.3% quarterly fall in the the first three months of 2018.

“Since retail sales account for around a fifth of GDP this could add as much as 0.4 percentage point to growth in the second quarter relative to the first quarter – although the boost is unlikely to be quite this large given the evidence of weak spending off the high street.”

2018-06-14 10:09:15

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