Home » UK Business News » Surprising increase in retail sales driven by bank holidays and sunny weather

Surprising increase in retail sales driven by bank holidays and sunny weather

By Nagasunder in UK Business News, posted June 23, 2023

Retail sales experienced an unexpected rise in May, according to official figures, contrary to expectations amidst inflationary pressures and rising borrowing costs

The Office for National Statistics (ONS) reported a 0.3 percent growth in retail sales volumes in May, surpassing economists' forecast of a 0.2 percent decline.

The boost in sales was attributed to warm weather, as well as the King's coronation and May bank holidays, which led to increased online purchases of outdoor goods and summer clothing.

Garden centers and DIY shops also benefited from the favorable conditions.

The month also saw a rise in spending on takeaways and fast food as people celebrated the coronation and the traditional May bank holiday.

However, sales in food stores declined as supermarkets raised prices, reflecting the nearly 20 percent increase in food inflation observed in the year leading up to April.

These figures coincide with a period of increased mortgage rates.

During this time, interest rates were projected to further rise in response to an uptick in core inflation, a measure that excludes volatile categories like food and fuel, reaching its highest level in 30 years.

In addition to the retail sales data, a closely monitored index measuring consumer sentiment indicated that consumer confidence is currently at its strongest point in 17 months.

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However, it's worth noting that the survey conducted by research group GfK did not include data from Wednesday and Thursday when surprise inflation figures and a Bank of England interest rate increase were announced.

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