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UK retail sales fall 3.9% in June | UK retail sales fall 3.9% in June |
(20 minutes later) | |
Retail sales in the UK fell 3.9% in June, after they had shown a sudden and unexpected 3.6% record surge in May. | Retail sales in the UK fell 3.9% in June, after they had shown a sudden and unexpected 3.6% record surge in May. |
The reversal from the revised May figure is the sharpest monthly decline since the series began in 1986. | |
Analysts had expected a decrease, with consumer spending being squeezed by rising fuel bills and food costs. | |
The fall cut the annual growth rate to 2.2%, while sales in the three months to June were up just 0.6% on the previous three months. | |
During June, both food and non-food sectors suffered their steepest monthly falls since records began, the Office for National Statistics (ONS) said. | |
Good weather in May had seen these sectors enjoy an unexpected sales boost, with summer drinks and clothing selling well. | Good weather in May had seen these sectors enjoy an unexpected sales boost, with summer drinks and clothing selling well. |
Rising prices | |
The sharp fall in sales during June pushed the value of the pound down as expectations rose that the next move in UK interest rates would be down. | |
"We continue to favour aggressive rate cuts in 2009 with the policy rate touching 3.5% lows seen in 2003," said James Knightley, an economist at ING. | "We continue to favour aggressive rate cuts in 2009 with the policy rate touching 3.5% lows seen in 2003," said James Knightley, an economist at ING. |
There were signs that the rising cost of food is beginning to feed through, with prices on average in the overall retail sector up 0.5% on the year, the biggest rise since May 2007 | |
Household goods sales posted their biggest monthly fall in June since 1991, and textile, clothing and footwear sales fell at their sharpest monthly rate since 2002. | |
However, sales in non-specialised stores rose 3.1%, the largest growth for this sector since August 2007. | However, sales in non-specialised stores rose 3.1%, the largest growth for this sector since August 2007. |
Sales by predominantly food stores rose by 6.5% over the year. | Sales by predominantly food stores rose by 6.5% over the year. |
And within the non-store retailing and repair sector sales rose by 6.5%, supporting recent indications that people are mending their existing products rather than buying new replacements. |