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UK CommentUK retail sales grew strongly in May

  1. Retail sales up 1.3 percent in May on the heels of strong growth in April
  2. Some of the strength in May was due to one-off effects
  3. Underlying consumption growth has strengthened, but not as much as May numbers could suggest
Retail sales up 1.3 percent in May on the heels of strong growth in April
UK retail sales continued to grow strongly in May, with total sales up 1.3 percent after growing 1.8 percent in April (revised from 1.6 percent). Retail sales excluding auto fuel were up 1.3 percent in May after growing 1.4 percent in April (revised from 1.3 percent). The consensus expectations for total retail sales and retail sales excluding auto fuel in May were 0.5 percent and 0.3 percent, respectively. According to the ONS, all main sectors saw increasing sales in May. However, household spending in May was likely buoyed by a sustained period of good weather as well as royal wedding celebrations.
Underlying consumption growth has strengthened, but not as much as May numbers could suggest
Over the past few months, both consumer and sector sentiment have indicated that private consumption growth should strengthen from its depressed levels. By May, y-o-y growth rates in retail sales improved by around 4 percent, from around 1.5 percent in Q1. However, as the details revealed, some of the strength in May was probably due to one-off effects, and we would expect the sales growth to moderate somewhat ahead.


 


Disclaimer

Kari Due-Andresen

Chief Economist Norway

Norway and UK

kadu01@handelsbanken.no

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