British retail sales plunge in May: official data

16th June 2011, Comments 0 comments

Retail sales in Britain slumped last month, as consumers tightened their belts after splashing out in April, official data showed on Thursday, sparking deep concern over the struggling economy.

The Office for National Statistics said in a statement that retail sales volumes slid 1.4 percent in May from the level in April.

That was the biggest drop since January 2010 and compared with market expectations for a 0.6-percent drop, according to a poll by Dow Jones Newswires.

"It's a shocking fall in retail sales," said economist Hetal Mehta at Daiwa Capital Markets Europe in London.

"Although we expected some unwinding of the holiday and weather-related spending splurge in April, this confirms our worst fears that the consumer sector is on a steep downward trend. The party spirit seems to have evaporated rapidly."

"Given the continued pressures consumers face from falling real wages and high unemployment, we do not see much improvement in the situation for households in the near term."

Retail sales meanwhile increased by just 0.2 percent in May compared with 12 months earlier, the ONS added. That compared with expectations for a larger rise of 1.2 percent.

Sales had surged in April on the back of the royal wedding, sunny weather and a late Easter holiday break.

However, concerns remain about weak consumer sentiment amid stagnant economic growth.

The British economy flatlined over the past six months, recent official data showed, reflecting the impact of deep government spending cuts and tax hikes.

© 2011 AFP

0 Comments To This Article