Retail sales slow as price rises hit the high street
2 min read
Retail sales grew at their slowest rate for four years in May, as price rises dampened demand.
Although sales were estimated to have risen by 0.9% last month, that marks the lowest growth rate since April 2013, according to the Office for National Statistics.
The ONS said rising prices “across all sectors” appeared to be responsible for the slowdown, with prices on average 2.8% higher than in May 2016 – the highest increase since March 2012.
The biggest fall was in non-food retail, were sales were down 1.2% year-on-year, while food stores sore a meagre rise of just 0.1%.
Today’s statistics will intensify the focus on living standards, with suggestions that the sharp post-referendum fall in the value of the pound is now feeding through to household spending.
This week also saw inflation rise to its highest level since 2013, while anaemic wage growth means many working families are taking home less each week than in 2016.
The encouraging news for the Government is that unemployment continues to decline, with 50,000 fewer people unemployed in the first three months of this year compared to the same period in 2016.
The unemployment rate was 4.6%, down from 5% the year before and the joint lowest since 1975.
But average weekly earnings fell in real terms compared with the year before by 0.4% if bonuses are included, and 0.6% without bonuses – the first annual decline in real average earnings since 2014.
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