UK Retail Sales Decline Eases in May, CBI Survey Shows
UK retail sales volumes continued to fall in May but at a slightly slower pace, while selling price growth slowed to its weakest in over a year, according to the CBI survey.
UK retail sales volumes fell short of seasonal norms in May, though the pace of decline eased compared to the previous two quarters, according to the latest Distributive Trades Survey from the Confederation of British Industry (CBI). The survey also showed that retail selling prices grew at the slowest rate in over a year and are expected to maintain a similar pace in June.
The CBI noted that weak demand continues to weigh on retailers' sentiment, which has remained negative since mid-2024. Firms anticipate that their business situation will deteriorate over the coming quarter, prompting plans to pare back investment and staffing. For interest rate traders, the persistent weakness in consumer spending and easing price pressures reinforce expectations that the Bank of England may consider rate cuts later this year, as the economy struggles to gain momentum. Traders can monitor the impact of these trends on UK gilt yields and the pound via NowPrice's live rates dashboard.
Looking ahead, the key focus will be on whether the modest improvement in sales volumes can be sustained, and whether selling price growth continues to soften. The next official retail sales data and the BoE's monetary policy decision will provide further clues on the trajectory of consumer demand and inflation. Markets will also watch for any signs that the labor market is weakening, which could accelerate the case for looser policy.