The British economy received a boost last month, as it has been revealed that retail sales bounced back in May after a poor performance the previous month.
Figures released by the Office for National Statistics (ONS) show that retail volumes rose by 1.4% in May, compared to the previous month.
The performance, which experts believe was down to the improvement in the weather at the end of May, exceeded expectations of a 1.2% rise. The unexpected performance in May has contributed to an annual retail sale rise of 2.4%.
“The end of weeks of relentless rain and the build-up to the Jubilee gave a useful boost in May but retailers tell us the effect was largely confined to the final week of the month when the sun came out and so did shoppers,” said Stephen Robertson, director general of the British Retail Consortium.
“The seemingly shy sunshine, hardly seen since March, had created pent-up demand for summer goods which was finally unleashed. Modest sales of coats and carpets gave way to much better sales of T-shirts and barbecues as interest finally turned outdoors.”
The improved performance, as well as the fall in inflation rates recently, has raised hopes of Britain climbing out of a double dip recession.
The ONS revealed recently that the Consumer Prices Index (CPI) measure of inflation fell to 2.8% in May – a two-year low.
“Retail competition has helped push inflation down to a two and a half-year low, which is a good sign that pressures on household budgets are easing,” said Mr Robertson.
“But incomes are still dropping in real terms and customers’ underlying lack of spending power remains a big problem,” he added.
After a very poor sales performance in April, the ONS has said that May’s strong performance has been driven by big increases in clothes and department store sales.
Sales of clothing and footwear saw a 3.4% monthly rise, as people took to the shops to finally kit out their summer wardrobe. Department store sales, driven by extensive discounting, were up a massive 11.6% on the previous year – the highest rise since February 2000.
“The trend in consumer spending should be improving as the burden from non-discretionary spending, that is food and energy, continues to ease, which makes more room for faster discretionary spending,” said Alan Clarke, an economist at Scotiabank.
“The trend in retail sales should therefore be upwards from here, helping to contribute to better news for growth as the year progresses.”
The retail performance is good news for the British economy, but many households are still struggling with debt. If you are keen to avoid debt, consider taking out a prepaid credit card. This lets you only a spend a pre-loaded amount, helping you to avoid falling into debt.