Retail sales figures released yesterday (16th June) by the ONS show that sales volumes in May 2016 were up 0.9% on the month, and were up 6.0% on the year. Average store prices fell by 2.8% in May 2016 compared with May 2015.
Commenting on the retail figures, David Kern, BCC Chief Economist, said:
“Along with stronger employment figures, the latest rise in retail sales confirm the findings of our own quarterly economic survey, which showed that UK growth was continuing, albeit at a slower pace.
“However, these figures provide further evidence of the acute contrast between relatively strong retail sales and other sectors of the economy, such as exports and manufacturing, which continue to struggle.
“In addition to persevering with low interest rates, in order to secure sustained growth there must be a stronger focus on supporting manufacturing, investment and exports.”
Commenting on the UK inflation figures for May, also published this week, David Kern said:
“Inflation remained unchanged in May, although most commentators expected a small increase.
“While it is likely that price growth will slowly edge up through the rest of this year, we expect that inflation will remain below the 2% target until well into 2017. Against this background, any thought of raising interest rates will be firmly off the agenda.
“However, low rates on their own are insufficient to stimulate economic growth. Much more forceful measures are needed in key areas, particularly supporting exporters and increasing infrastructure investment.”