June 7 (Bloomberg) -- U.K. retail sales fell in May as consumers’ uncertainty about their jobs and incomes increased, the British Retail Consortium said.
Sales at stores open at least 12 months, measured by value, fell 2.1 percent from a year earlier, compared with a 5.2 percent increase in April that was spurred by spending over public holidays for Easter and the royal wedding, the London- based BRC said in an e-mailed statement today.
Accelerating inflation and government budget cuts are damping consumer confidence. The economy stagnated in the six months through March, while household spending dropped the most in almost two years in the first quarter. The Bank of England will keep its key interest rate at a record-low 0.5 percent this week, according to a Bloomberg News survey, as officials focus on supporting the recovery.
“Customers’ fundamental reluctance to spend is now clear to see,” BRC Director General Stephen Robertson said in the statement. “Disposable incomes continue to be squeezed by uncomfortably high inflation and low wage growth, while uncertainty over the effects of government cuts is hitting consumers’ sentiment about future finances.”
In the three months through May, food sales rose 1.9 percent from a year earlier on a like-for-like basis, the BRC said. Sales of non-food items dropped 2 percent.
After the boost to sales from the holidays in April, “this is a more realistic reflection of how tough conditions on the high street really are,” Robertson said.
The BRC report, which is compiled in conjunction with accountancy firm KPMG LLP, measures changes in the actual value of retail sales and doesn’t adjust for price changes.
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