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Retail sales in Great Britain slumped by 1.2% last month, with retailers blaming poor weather and cost of living pressures.
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Retail sales volumes fell by 1.2% in June from May, following an increase of 2.9% in May, according to the Office for National Statistics. Economists had expected a smaller fall of 0.4%.
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Sales fell across most sectors, and were down by 2.1% at non-food stores (department, clothing, household, and other non-food stores) while supermarkets and other food stores posted a 1.1% decline.
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Grant Fitzner, the ONS chief economist, said department stores, clothing shops and furniture stores were the biggest contributors to the fall.
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Retail sales fell back from May’s recent high point with falls across all main shop types, with the exception of petrol stations.
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Retailer commentary suggested that both poor weather and economic conditions had an effect, as consumers showed caution with their spending.
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Retail sales are estimated to have fallen 1.2% in June 2024, following an unrevised rise of 2.9% in May.
Read more ➡️ https://t.co/5D0Ir5Q61s pic.twitter.com/nsQ59CiX1s
— Office for National Statistics (ONS) (@ONS) July 19, 2024
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Separate figures from the ONS showed the government borrowed £14.5bn in June, £3.2bn less than in June last year. It was the lowest June borrowing – the difference between public sector spending and income – since 2019.
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Analysts had pencilled in borrowing of £12bn.
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The interest payable on central government debt fell by £5.5bn to £7.4bn, largely because the interest payable on index-linked gilts (government bonds) rises and falls with the retail prices index, which has reduced sharply.
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Public sector net borrowing excluding public sector banks was £14.5 billion in June 2024, £3.2 billion less than in June last year. This was the lowest June borrowing since 2019.
Read more ➡️ https://t.co/bTZeRDJFM1 pic.twitter.com/G0BlVIahAY
— Office for National Statistics (ONS) (@ONS) July 19, 2024
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Important Events
Retail sales in the second quarter declined 0.1% from the first quarter, contributing little to GDP growth.
Rob WoodThe chief UK economist at Pantheon Macroeconomics said this left his second-quarter GDP growth forecast unchanged at 0.6%, compared with the Bank of England’s forecast of 0.5%. “This is due to strong consumer spending on services and business-to-business spending also supporting output,” he said.
Poor weather conditions in June also led to lower consumer spending. Rainfall in June was 24% below average and May was 19.7% above average, but June was much cooler than May compared to seasonal averages. The average temperature in June was 0.2 degrees below average, while May was the hottest since at least 1884. This likely explains the decline in sales in June.
Retail sales have been very volatile this year, with wide fluctuations due to weather and measurement issues. These large fluctuations can sometimes obscure underlying trends. Retail sales did not surge in May, and are not declining sharply now. Year-over-year retail sales growth has been trending steadily upward, albeit without spectacular fluctuations, as consumers’ real income growth improves, they need to replace items such as televisions and clothing, and inflation for goods slows relative to services.
Charlie Hugginssaid Mr. Wealth Club, an investment firm.
Retail sales fell short of expectations in June after beating expectations in May, continuing a volatile monthly sales pattern seen since the start of the year as unusual weather conditions and a cautious view of the economy weighed on the figures.
Consumers weren’t big spenders in June; sales were down in every category except fuel. But let’s not forget that May was a particularly strong month. Sales over the past three and six months have been broadly flat, suggesting that consumers are in reasonably good health, but far from wealthy.
Fluctuations in monthly retail sales make predicting the future of the economy even harder than usual. June was not a good month for retail. But inflation is calming, wages are rising, and the election is over, providing some much-needed certainty. This means sales could easily recover over the summer, especially if the weather gets a little more favorable.
Introduction: UK retail sales fall 1.2% as June government borrowing reaches lowest since 2019
Good morning and welcome to our continuing coverage of business, financial markets and the global economy.
UK retail sales fell 1.2% last month, with retailers blaming bad weather and rising living costs.
Britain’s retail sales fell 1.2% in June from May, after rising 2.9%, according to the Office for National Statistics. Economists had expected a fall of 0.4%.
Sales fell across most sectors, with non-food stores (department stores, clothing stores, home goods stores, and other non-food stores) falling 2.1% and supermarkets and other food stores falling 1.1%.
Grant PfitznerThe ONS chief economist said department stores, clothing stores and furniture stores were the biggest contributors to the fall.
Retail sales fell from recent highs in May, with declines at all major stores except gas stations.
Comments from retailers suggested that both the bad weather and the economic situation played a role, as consumers became more cautious about spending.
Retail sales are estimated to have decreased 1.2% in June 2024, following an unrevised 2.9% increase in May.
Read more ➡️ https://t.co/5D0Ir5Q61s pic.twitter.com/nsQ59CiX1s
— UK Office for National Statistics (ONS) (@ONS) July 19, 2024
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Separate data from the Office for National Statistics showed the government borrowed £14.5 billion in June, £3.2 billion less than in June last year. This was the lowest June borrowing – the difference between public sector spending and income – since 2019.
Analysts had expected borrowing of 12 billion pounds.
Interest payments on central government debt decreased by £5.5 billion to £7.4 billion, mainly due to interest payments on inflation-linked bonds rising and falling in response to the sharp fall in the retail price index.
Net borrowing by the public sector, excluding public banks, was £14.5 billion in June 2024, down £3.2 billion from June last year. This was the lowest June borrowing since 2019.
Read more ➡️ https://t.co/bTZeRDJFM1 pic.twitter.com/G0BlVIahAY
— UK Office for National Statistics (ONS) (@ONS) July 19, 2024
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