British retail sales fell in June as drivers cut back on record-high gasoline prices, with consumers spending less than predicted, according to figures, albeit the trend remained modest as households struggled with increasing inflation.
The Office for National Statistics reported on Friday that retail sales volumes declined by a smaller-than-expected 0.1 per cent in May. Reuters polled economists, who predicted a 0.3 per cent monthly drop.
“After taking account of rising prices, retail sales fell slightly in June and although they remain above their pre-pandemic level, the broader trend is one of decline,” Heather Bovill, an ONS statistician, said.
Sales volumes fell by 1.2 per cent between April and June.
Excluding vehicle fuel, volumes increased by 0.4 percent month on month in June, compared to a 0.4 per cent drop predicted in a poll.
Automotive fuel sales volumes plummeted by 4.3 per cent, the most since October of last year, when a truck driver shortage caused a wave of panic buying of gasoline and diesel.
May’s monthly reduction was judged to be more severe than previously assumed, with a loss of 0.8 per cent from April compared to an initially reported drop of 0.5 per cent.
The British economy is feeling the burden of inflation, which is on track to reach double digits, thanks in large part to skyrocketing fuel prices.
On August 4, the Bank of England is expected to hike interest rates for the sixth time since December, potentially increasing the drag on economic growth.
Capital Economics economist Paul Dales said Friday’s report was influenced by an extra public holiday last month.
“But even so, it is becoming clearer that the cost of living crisis is behind the steady decline in sales volumes in recent months,” Dales said. “We think a recession is just around the corner.”
Earlier in the day, a study revealed that consumer confidence has stayed at its lowest level since records began in 1974.
(Adapted from Reuters.com)