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UK retail sales slow in May as shoppers buy fewer clothes

[LONDON] British retail sales growth slowed sharply last month after strong growth in April, as shoppers bought fewer clothes, official data showed on Thursday.

Retail sales volumes rose 0.2 per cent in May - broadly in line with economists' expectations - to show 4.6 per cent growth on the year, the Office for National Statistics said.

Economists had expected retail sales to be flat in May after rising a downwardly revised 0.9 per cent in April, when clothing sales were boosted by unusually warm weather. By contrast, May was cooler than normal.

The ONS said clothing sales were 1.6 per cent down on April's level, the biggest fall since September 2014. Food stores had a rare good month, with volumes up 0.6 per cent, the biggest increase since December.

Private-sector surveys had given contrasting pictures of the sector in May. The Confederation of British Industry reported the fastest retail sales growth since December, while the British Retail Consortium said sales growth was more modest.

Sales in the three months to May were up 4.5 per cent compared with a year earlier, the slowest year-on-year growth in six months. In cash terms, sales in the three months to May were just 1.4 per cent higher, the smallest increase in two years, as average selling prices continued to fall compared with 2014.

Nonetheless, many economists have said that when adjusted for lower prices, British consumer spending could be on track for its strongest year in a decade, as low inflation and rising wages give households more disposable income.

Official data on Wednesday showed the fastest wage growth in four years.

But consumer spending was soft in the first three months of the year, and some Bank of England officials have expressed surprise that the past year's slump in oil prices has not spurred more households to splash out.

Not all the increase in consumer spending is captured in retail sales. Households have been particularly keen to spend more on eating out and travel, which is not included in the ONS data.

REUTERS