British retail sales tumble 2.7 per cent in May

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.British retail gross sales tumbled 2.7 per cent in Could, a a lot steeper drop than anticipated and the primary this yr, as customers reduce on purchases of meals and family items.Friday’s determine from the Workplace for Nationwide Statistics was under the 0.5 per cent decline forecast by economists polled by Reuters.The autumn, the biggest for any month since December 2023, adopted an increase in April, which retailers stated was right down to the unusually sunny climate. The quantity of meals retailer gross sales fell again in Could, reversing a bounce in April. General retail gross sales volumes had been down 1.3 per cent in Could in contrast with the identical month final yr.Paul Dales, economist on the consultancy Capital Economics, stated: “The sharp drop again in retail gross sales volumes in Could provides to different proof that the burst of financial development in Q1 is over.”Retail gross sales figures are the primary official financial knowledge for Could, offering a sign of client demand.The decline got here as separate figures printed by the ONS on Friday confirmed the UK authorities borrowed greater than anticipated in Could. Borrowing was £17.7bn final month, exceeding the £17.1bn forecast by the Workplace for Finances Duty, the UK’s official fiscal watchdog, and up £700mn from the identical month final yr.Borrowing — the distinction between complete public sector spending and revenue — for the primary two months of the brand new tax yr was £37.7bn, under the £40.7bn forecast by the OBR. Chancellor Rachel Reeves is beneath stress to satisfy her fiscal rule to stability day-to-day spending with revenues by 2029-30 whereas bettering public companies and spurring development.