The volume of goods sold online and in stores dropped 2.7% after four consecutive monthly increases
Published Fri, Jun 20, 2025 · 02:56 PM
[LONDON] UK retail sales plummeted in May, the first time they have fallen this year, in a sharp reversal that suggests the economy could be struggling in the second quarter.
The volume of goods sold online and in stores dropped 2.7 per cent after four consecutive monthly increases, the Office for National Statistics said on Friday (Jun 20). It was far worse than the 0.5 per cent fall expected by economists and the biggest drop since December 2023.
While the first quarter saw the retail sector’s best performance since 2021, a sales surge fuelled by good weather and rising real wages has come to a sudden halt.
A weaker retail sector will add to headwinds facing the UK economy in the second quarter after bumper growth at the start of 2025. While gross domestic product growth hit 0.7 per cent in the first quarter, the economy contracted in April and forecasters expect a sharp slowdown over the second quarter.
There was a 5 per cent plunge in food sales with weakness across the board in the retail sector. Household good stores suffered a 2.5 per cent tumble and clothing and footwear saw a 1.8 per cent slump.
The pound pared gains after data showed retail sales fell more than expected, to trade 0.1 per cent higher at US$1.3484 on the day. Traders priced in 48 basis points of interest-rate cuts from the Bank of England by the end of the year as of Thursday. BLOOMBERG
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