By William Schomberg
LONDON (Reuters) -British customers in the reduction of on procuring in Could within the face of fast-rising inflation, and a measure of their confidence sank to a report low this month, in response to knowledge that underscored the size of the cost-of-living squeeze.
The Workplace for Nationwide Statistics mentioned on Friday that gross sales volumes in Could fell by 0.5% on the month, a barely smaller decline than the 0.7% drop anticipated by economists polled by Reuters.
However the ONS additionally slashed its estimate for month-on-month gross sales volumes development in April to 0.4% from an initially reported 1.4% after an annual evaluation of its seasonal changes course of.
Could’s fall was pushed by weaker meals gross sales, Heather Bovill, ONS deputy director for surveys and financial indicators, mentioned.
“Suggestions from supermarkets instructed prospects had been spending much less on their meals store, due to the rising price of residing,” she mentioned.
Earlier on Friday, Britain’s longest-running gauge of client confidence, the GfK survey, fell to its lowest since data started in 1974.
“The patron temper is presently darker than within the early levels of the COVID pandemic, the results of the 2016 Brexit referendum and even the shock of the 2008 world monetary disaster, and now there’s speak of a looming recession,” Joe Staton, shopper technique director at GfK, mentioned.
Different knowledge revealed this week which has raised questions on how a lot greater the Financial institution of England can elevate rates of interest, after 5 hikes since December, with out pushing the financial system right into a recession.
Worries in regards to the hit to residing requirements contributed to 2 defeats on Friday in parliamentary by-elections for Prime Minister Boris Johnson’s Conservative Occasion.
Johnson responded to the losses by pledging to do extra to sort out the cost-of-living disaster.
Total UK inflation is operating at a 40-year excessive of 9.1% and, in response to the Financial institution of England, is about to rise additional to greater than 11% in October.
Sterling weakened briefly after the retail gross sales knowledge earlier than recovering.
The ONS mentioned meals retailer gross sales fell by 1.6% in Could from April, the most important month-to-month fall since January.
“Many shoppers are shopping for down, notably with meals, selecting worth vary objects the place they may beforehand have purchased premium items,” Helen Dickinson, chief govt of the British Retail Consortium, mentioned.
Automotive gasoline gross sales volumes rose by 1.1%, probably reflecting a fall within the variety of individuals working solely from residence, the ONS mentioned.
The ONS mentioned retail gross sales within the three months to Could fell by 1.3% after falling by 1.4% within the three months to April.
In contrast with a 12 months in the past, gross sales volumes had been 4.7% decrease.
Excluding gasoline, which has soared in worth, gross sales volumes had been down by 0.7% on the month and by 5.7% in annual phrases.
(Reporting by William Schomberg; Enhancing by John Stonestreet and Hugh Lawson)
