Surprise rise in retail sales thanks to bank holidays and sun

Jun 23, 2023

There was a surprise rise in retail sales last month despite inflationary pressure and rising borrowing costs, official figures show.

The Office for National Statistics (ONS) said retail sales volumes grew by 0.3% in May, far better than the 0.2% decline forecast by economists, as warm weather and the King’s coronation and May bank holidays, boosted online sales of outdoor goods and summer clothes.

Garden centres and DIY shops also benefitted.

More was spent on takeaways and fast food during the month as people celebrated the coronation and the usual May bank holiday. But food store sales fell as supermarkets increased prices, the ONS said.

Food inflation has risen nearly 20% in the year up to April.

The figures cover the month where mortgage rates increased further.

At the time, interest rates were projected to rise higher in response to an increase in core inflation, a measure of price rises excluding volatile categories such as food and fuel, to what had been the highest level in 30 years.

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Also released on Friday was a closely watched index of shopper sentiment, which said consumer confidence is at its strongest in 17 months.

The survey, by research group GfK, did not cover data for Wednesday and Thursday when shock inflation figures and a Bank of England interest rate rise were announced.

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