UK retail is back in decline as the cost of living crisis escalates

UK retail sales fell at a slower pace in May as the cost of living crisis continued. According to the Office for National Statistics, retail sales rose 0.3% in May, up from 0.5% in the previous month. This growth translated to a 2.1% year-on-year decline. Economists polled by Reuters had expected the country’s sales to fall 2.6%.

Excluding volatile food and energy prices, core sales rose 0.1% in May, better than an expected 0.3% decline. They are down 1.7% from the same period in 2022. These figures show that the country’s retail sector is struggling to recover. get married said :

“When asked about their shopping habits in the past two weeks, 44% of adults reported buying less food when grocery shopping. This share seems to be increasing from 41% in the previous period.

The ONS blamed the decline on grocery stores, where volumes fell by 1.6% in May. Meanwhile, the share of online retail sales declined to 26.6% in May from 27.1% in April. They are even higher than before the pandemic.

The UK retail sales figures came two days after the country released strong consumer inflation data. Data showed that headline consumer inflation rose to 8.7% in May, while core inflation rose to 6.7%.

As a result, the bank is unable to control the rise inflammation. On Thursday, the bank decided to raise interest rates by 0.50%, above the median estimate of 0.25%. As I wrote about here it pushed prices to their highest level in years.

However, there are concerns about whether higher interest rates in the UK will reduce inflation. Some analysts believe that more work needs to be done from fiscal policy to reduce inflation.