–May Retail Sales inc. fuel +0.6% m/m; +2.2% y/y
–May retail sales ex fuel +0.5% m/m; +3.4% y/y

LONDON (MNI) – Retail sales volumes rose in May, helped by growing
sales at predominantly food stores, according to figures released by
National Statistics Thursday.

Retail sales volumes including auto fuel rose 0.6% on the month in
May and were up 2.2% on the year. The increase was well above the median
forecast for a rise of 0.1% on the month and just above the year-on-year
forecast for a rise of 2.1%.

Excluding auto fuel, retail sales grew by 0.5% on the month and by
3.4% on the year, above the median expectation for a 0.1% monthly gain
but below the yearly forecast of 3.5%.

Figures for April were revised to flat on the month for all sales
volumes from up 0.3% on the month.

Sales at predominantly food stores drove growth in May with volumes
up 1% on the month, while non-food store sales were flat.

Within non-food there was a mixed picture with strong growth in
household goods and department stores where growth stood at 1.7% and
1.2% on the month respectively. National Statistics said that there was
anecdotal evidence of higher sales at electrical item retailers in the
run up to the World Cup with customers purchasing new televisions.

These rises were offset by a 1.3% monthly fall in sales at
textile, clothing and footwear retailers and a 0.8% fall in other
stores’ sales volumes.

Non-store retailing and repair volumes rose 1.8% on the month.

In the three months to May, volume growth including auto fuel rose
to 1% compared with the previous three months, up from flat in the
previous month. Ex-auto fuel growth increases to 0.6% from 0.1%.
National Statistics warned that the three month comparisons were
affected by the weak January figures which were depressed due to the
cold weather which had the effect of flattering the three month growth
comparison for the including auto fuel measure.

The retail sales deflator, a guide to price inflation on the High
Street, eased to 2.3% in May from 2.9% in April. Excluding auto fuel the
deflator declined to 0.6% from 1%.

Bank of England Governor Mervyn King warned last night that the
Bank of England’s recent inaction on interest rates should not be seen
as a “sign of complacency” adding that when the time came interest rates
would likely rise before unwinding quantitative easing.

He added, though, that monetary policy had to be set in the light
of the looming fiscal tightening and continued fragility in financial

–London bureau: 00 44 207 862 7492; email: drobinson@marketnews.com

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