Britain's retailers enjoyed the strongest quarter in more than a decade between April and June, but consumers were less willing to spend towards the end of the period, according to the Office for National Statistics.
Retail sales increased by 1.6% in the second quarter compared with the first, which was the strongest rate of quarterly growth since March 2004.
The strong performance was driven by late timing of Easter. The volume of sales rose by 1% in April, but fell by 0.5% in May and increased by just 0.1% in June.
The June rise, published on Thursday, came in below City expectations of 0.3% and suggested the World Cup did little to boost sales.
The small increase was driven by a higher volume of petrol, household goods, internet and food sales. It was dragged down by falling sales of clothing and footwear and in department stores.
Alan Clarke, economist at Scotiabank, said weaker-than-expected June retail sales could be the latest sign that elements of the UK economy are cooling.
"Could this deceleration in retail sales be correlated with the rolling over in housing indicators – dampening the feelgood factor? There seems to be some substance for this with department store sales slowing somewhat in the last three to four months.
"Furthermore, with wage inflation also not that buoyant, household real income growth is sluggish – which also undermines spending appetite."
The ONS is expected to say on Friday that the economy overall grew by 0.8% in the second quarter – the same as the first quarter. Despite an increasingly established recovery, wage growth is still lagging behind inflation, keeping pressure on household finances.
Howard Archer, chief UK economist at IHS Global Insight, said UK consumers might have taken "a breather" in recent weeks after splashing out earlier in the year.
He added: "Survey evidence from the CBI indicates that retail sales rebounded markedly in July, seemingly helped by the warmer weather. However, it is questionable how strong consumer spending can be on a sustained basis until earnings growth picks up appreciably."
The annual rate of growth in retail sales slipped slightly to 3.6% in June from 3.7% in May, again disappointing expectations of an increase to 3.9%. Samuel Tombs, senior UK economist at Capital Economics, said the World Cup and late summer sales probably weighed on sales in June.
"First, the World Cup is likely to have kept consumers out of the shops. In the past six World Cup years, sales have fallen by 1% on average in June before bouncing back in July.
"Second, the slightly later start to the summer sales this year than last is likely to have persuaded consumers to delay their spending until they began."
theguardian.com
Retail sales increased by 1.6% in the second quarter compared with the first, which was the strongest rate of quarterly growth since March 2004.
The strong performance was driven by late timing of Easter. The volume of sales rose by 1% in April, but fell by 0.5% in May and increased by just 0.1% in June.
The June rise, published on Thursday, came in below City expectations of 0.3% and suggested the World Cup did little to boost sales.
The small increase was driven by a higher volume of petrol, household goods, internet and food sales. It was dragged down by falling sales of clothing and footwear and in department stores.
Alan Clarke, economist at Scotiabank, said weaker-than-expected June retail sales could be the latest sign that elements of the UK economy are cooling.
"Could this deceleration in retail sales be correlated with the rolling over in housing indicators – dampening the feelgood factor? There seems to be some substance for this with department store sales slowing somewhat in the last three to four months.
"Furthermore, with wage inflation also not that buoyant, household real income growth is sluggish – which also undermines spending appetite."
The ONS is expected to say on Friday that the economy overall grew by 0.8% in the second quarter – the same as the first quarter. Despite an increasingly established recovery, wage growth is still lagging behind inflation, keeping pressure on household finances.
Howard Archer, chief UK economist at IHS Global Insight, said UK consumers might have taken "a breather" in recent weeks after splashing out earlier in the year.
He added: "Survey evidence from the CBI indicates that retail sales rebounded markedly in July, seemingly helped by the warmer weather. However, it is questionable how strong consumer spending can be on a sustained basis until earnings growth picks up appreciably."
The annual rate of growth in retail sales slipped slightly to 3.6% in June from 3.7% in May, again disappointing expectations of an increase to 3.9%. Samuel Tombs, senior UK economist at Capital Economics, said the World Cup and late summer sales probably weighed on sales in June.
"First, the World Cup is likely to have kept consumers out of the shops. In the past six World Cup years, sales have fallen by 1% on average in June before bouncing back in July.
"Second, the slightly later start to the summer sales this year than last is likely to have persuaded consumers to delay their spending until they began."
theguardian.com
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