Sales sore as UK shoppers snap up new clothes
Aprils unusually bad weather put a dampener on clothing sales but the improved weather last month has ushered in some staggering growth.
The Office for National Statistics confirmed that the May increase was 6% higher than for the same month in 2015. This indicates a 4.3% rise on a month to month basis which is heralded as the biggest jump in more than two years.
This is whilst analysts expected retail volumes to only increase by a mere 0.2% although these predictions were made on the back of poor sales in February through to April.
According to Alan Clarke, an economist at Scotiabank this could also be good news for the GDP growth in the second quarter of the 2016.
Separate figures from the British Retail Consortium earlier this month also showed a 1.4% rise in May retail sales when compared to April, on the back of rising demand for summer clothes.
It is not all good news though.
Chancellor of the Exchequer George Osborne said this week that he would have no choice but to raise taxes and cut public spending if the UK voted ‘out’ as there would be a £30bn hole in public finances that Brexit would possibly open up.
Some analysts also warn that this growth is temporary and will stall as the depreciation of sterling continues. This is because the cost of purchase and production for retailers will rise resulting in more expensive goods for consumers.
Growth in retail sales volumes therefore is likely to slow markedly in the second half of this year, regardless of the referendum result.