Consumers are taking a pause for breath. After some strong monthly increases, spending in high streets, shopping malls and online fell by 0.5% in May. The City shrugged off the decline and it was right to do so. This does not portend the end of the recovery that has now been under way for the past year or so.
Retail sales bounce around from month to month. The May fall followed strong increases in both April and March, with the increase over the latest three months a strong 1.3%. That's a better guide to the underlying trend than one month's figures and dovetails with the CBI's latest upbeat snapshot of the state of manufacturing.
Further increases in retail sales can be expected in the second half of the year, despite the continued squeeze on real incomes. Unemployment is coming down and the strength of the pound - while making life more difficult for exporters - will make imports cheaper and bear down on inflation.
Indeed, the most interesting thing about the latest retail sales numbers was not the monthly drop in the volume of goods being sold, but the fact that consumers were paying 0.7% less for the stuff they were buying last month than they were in
In other words, there is not an awful lot here to make the Bank of
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