UK retail gross sales rebound in heat Could as shopper confidence improves – enterprise dwell

May the leap in garments buying final month have something to do with Taylor Swift’s Eras Tour, which started this month and runs till August?

Kathleen Brooks, analysis director at XTB, suspects Swifties have been snapping up new outfits prepared for the live shows.

She writes:

UK retail gross sales surged final month, and core retail gross sales that exclude auto gas rose at a 1.2% annualized tempo in Could, after falling by 2.5% in April. The ONS stated that gross sales rebounded after a moist April, and gross sales volumes grew throughout most sectors, with clothes and furnishings gross sales rebounding strongly.

May this be the Taylor Swift impact, with folks (together with myself) splurging on new outfits forward of her period’s tour, the UK leg of which is about so as to add £1 billion to the UK economic system?

There is no such thing as a denying that in the present day’s retail gross sales report paints a constructive image for the UK shopper, Brooke provides:

Non -food retailer gross sales rose by 3.5% in Could, the best stage since April 2021, and on-line gross sales surged by 5.9%, the best month-to-month improve since April 2022.

The ONS did caveat the enhance to gross sales in comparison with a yr in the past, by reminding us that final Could there was an additional financial institution vacation for the King’s Coronation. Nevertheless, after a droop on the finish of spring, the buyer seems to be again because the UK lastly strikes in direction of summer time.

The newest public funds information exhibits that the UK’s web debt as a proportion of GDP stays at ranges final seen within the early Nineteen Sixties.

The ONS reported this morning that public sector web debt excluding public sector banks was provisionally estimated at 99.8% of gross home product (GDP) on the finish of Could.

That’s 3.7 proportion factors greater than a yr in the past.

In historic phrases, it’s a stage final seen in 1961, when Harold Macmillan was prime minister and the UK was paying off the debt incurred within the second world conflict.

As flagged within the introduction, the UK borrowed one other £15bn in Could. Though that’s £800m greater than a yr in the past, it’s £600m decrease than forecast by the Workplace for Finances Duty.

British shopper sentiment has risen to a two-and-a-half yr excessive this month, market analysis firm GfK studies this morning.

The GfK shopper confidence survey has risen to -14 in June, up from from Could’s -17, the best studying since November 2021.

That will properly have fed by way of to the increased retail sales spending last month.

The survey discovered that households have a extra optimistic view of the financial state of affairs over the past 12 months, and the outlook for the following yr.

Nevertheless, folks grew gloomier about their very own private funds, highlighting that occasions are robust though inflation has fallen again to 2%.

Joe Staton, consumer technique director at GfK, explains:

These measures on the economic system registered sharp will increase of seven factors and 6 factors respectively, and there was a welcome three-point enhance in intentions to make main purchases.

Whereas June’s studying of -14 is the third month in a row that confidence has elevated, the headline rating stays damaging owing to the difficulties so many have skilled because the unrelenting cost-of-living disaster batters family budgets.

Good morning, and welcome to our rolling protection of enterprise, the monetary markets and the world economic system.

At the moment we shall be digesting the ultimate slug of great financial information forward of the UK common election, which have simply been launched.

The newest retail gross sales figures present that shopper spending picked up final month, whereas new borrowing statistics are casting a light-weight on the public funds.

Could’s retail gross sales stats present that gross sales volumes rebounded in Could, after a droop in April when bad weather drove customers from the excessive avenue. That’s fairly stronger than the 1.5% rise forecast by Metropolis economists.

Retail gross sales volumes jumped by 2.9% in Could 2024, following a fall of 1.8% in April, the Workplace for Nationwide Statistics studies.

The ONS says:

Gross sales volumes rose throughout most sectors, with clothes retailers and furnishings shops rebounding following poor climate in April.

Last month was the warmest May on record, in a sequence going again to 1884, in accordance with the Met Workplace.

Extra broadly, gross sales volumes rose by 1.0% within the three months to Could 2024 compared with the earlier three months, the ONS provides.

Retail gross sales volumes rose throughout all essential sectors, the ONS says.

The most important development was seen amongst “non-store retailers”, reminiscent of on-line retailers, the place volumes jumped by 5.9% on the month.

At department shops, clothes retailers, family items sellers, and different non-food shops, volumes rose by 3.5% in Could.

These will increase counsel folks really feel extra assured about financial circumstances – as proven by the newest ballot of shopper confidence from GfK. However whereas which will bolster Rishi Sunak’s declare that the economic system is popping the nook, this isn’t offering the PM with a ballot enhance….

The public funds, in the meantime, present that the UK borrowed £15bn in Could to cowl the distinction between governent spending and earnings. That’s a bit decrease than forecast, however £800m greater than in Could 2023.

It’s the third highest Could borrowing since month-to-month information started in 1993.

The agenda

• 7am BST: UK public funds for Could

• 7am BST: UK retail gross sales for Could

• 9am BST: Eurozone flash PMI survey for June

• 9.30am BST: Eurozone flash PMI survey for June

• 2.45pm BST: US flash PMI survey for June

• 3pm BST: US current dwelling gross sales for Could