Biggest fall for retail sales in six months in June, says ONS

Helen Cahill
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UK retail sales have been hit by the largest month-on-month decline for six months in June, according to the Office for National Statistics (ONS).

Compared to May, the quantity purchased in the retail industry decreased by 0.9 per cent, and the amount spent also fell by 0.9 per cent.

Economists had been predicting a fall of 0.6 per cent.

The fall comes after a gain of 0.9 per cent month-on-month in May and 1.8 per cent in April.

Retail sales were still up by 4.3 per cent year-on-year, however.

Melanie Richard, ONS head of retail sales, said all store types had experienced growth in June "with the exception of clothing and footwear".

"Some correction in retail sales was always likely in June after they had seen very strong growth in May and April and there was also a significant falling back in clothing sales due to unhelpful weather," said Howard Archer of IHS Global Insight.

Average store prices - including petrol stations - fell by 2.5 per cent compared to June last year.

Samuel Tombs, chief economist at Pantheon Macroeconomics, said the fall was "a taste of weakness to come."

"June’s sharp decline in retail sales marks the beginning of a much weaker period of consumer spending. The decline was led by a 1.8% month-to-month drop in clothing sales, due partly to bad weather," he said.

"Petrol sales will fall sharply over the coming months in response to the jump in sterling oil prices, then retailers will begin to pass on higher import prices to consumers from early 2017. The combination of higher prices, job cuts and the Chancellor’s decision not to immediately alter the fiscal plans likely will bring the recovery in consumer spending to its knees."