James Smith, developed markets economist at ING, points out that the UK retail sales have fallen for the second month in a row and some of this is clearly down to the weather, where colder temperatures appear to have discouraged people from updating their summer wardrobes.
“Clothing and footwear sales slipped by 4.5% compared to April. This weakness means that the year-on-year growth rate in retail sales (ex-fuel) has slipped back from just over 6% in March to 2.2% now – although admittedly this also has a lot to do with the World Cup/weather-related spike at the same time last year.”
“Barring a big recovery in June (which given the recent deluge of rain, seems fairly unlikely), it looks like consumer spending will add to the second quarter growth slump. It looks increasingly likely that second-quarter growth could come in flat or only marginally positive, given the likely drag from manufacturing production and inventory rundowns too.”
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