Business

Retail sales boosted by May clothing boom

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Retail sales volumes rose by a much better than expected 0.9% in May, compared with the previous month, as UK consumers bought more clothing.

Clothing sales suffered in April as unseasonably cold weather deterred shoppers from summer purchases.

Better weather in May sent clothing sales up 4.3% month-on-month - the biggest rise for more than two years.

The Office for National Statistics said the May increase was 6% higher than for the same month in 2015.

Analysts had expected retail volumes to increase by just 0.2% last month.

Scott Bowman, UK economist at Capital Economics, said: "It appears that Brexit concerns haven't been weighing on consumer spending. Looking ahead, we would expect retail spending to keep up a strong pace."

Average prices at stores, including petrol stations, fell by 2.8% year-on-year.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the slide in prices was the reason for the strong growth.

He said the fall in sterling over the past nine months meant retailers faced rising costs that they would soon pass on to consumers.

"Growth in retail sales volumes therefore is likely to slow markedly in the second half of this year, regardless of the referendum result," Mr Tombs added.

Online sales jumped by 6.4% compared with April and were 21.5% higher than May last year.

The ONS also revised up the rise for April from 1.3% to 1.9%, reflecting an unusually high amount of data received late from stores.

The three-month rate, which is less volatile than the monthly figures, rose to 1.5% from 0.9% in April.

"Even a significant fall in sales in June would see growth in the second quarter above the 1.3% rate experienced for the first quarter," Mr Bowman added.

Martin Beck, senior economic advisor to the EY ITEM Club, said the May rise in retail sales meant UK economic growth for the second quarter was "increasingly likely" to eclipse the 0.4% increase recorded for the first three months of the year.

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