THE GUARDIAN: The slump in retail sales in May does not bode well for GDP growth in the second quarter
Retail sales dived by twice the expected rate in May as consumers cut their spending on clothes and other non-food items to pay for higher petrol prices.
Retailers said the difficult economic outlook had depressed consumer confidence and encouraged shoppers to stay away from the high street.
Sales volumes dropped 1.4%, more than reversing the 1.1% increase in April that was mainly attributed to the royal wedding and unseasonally warm weather.
Vicky Redwood, senior UK economist at Capital Economics said the figures showed that April was a temporary blip to a long-term downward trend.
"The underlying trend in sales over the past several months still looks broadly flat at best. What's more, we expect this trend to worsen as households respond to the intensifying squeeze on their real pay. We continue to think that overall household spending will drop by about 1% this year," she said. » | Phillip Inman | Thursday, June 16, 2011
