UK Retail Sales Decline Sharply in June Due to Weather and Election Uncertainty

Retail sales in Great Britain fell by 1.2% in June, exceeding forecasts, following a 2.9% increase in May, according to the Office for National Statistics (ONS). Department stores, clothing shops, and furniture stores were the primary contributors to the decline. Sales volumes in food stores fell by 1.1%, mainly due to reduced supermarket sales, while non-food stores experienced a 2.1% drop.

Factors such as cooler-than-average temperatures, election uncertainty, and the ongoing cost-of-living crisis were cited as key reasons for the decrease. Despite wages rising faster than inflation, high inflation over the past two years has pressured British consumers. The Bank of England, which has kept interest rates at 5.25%, is now weighing whether to cut rates to address high borrowing costs. Meanwhile, the budget deficit for June stood at £14.5 billion, surpassing the £11.6 billion forecasted by the Office for Budget Responsibility.