UK consumer confidence hits record low, as people cut back on food shopping

Rolling coverage of the latest economic and financial news, as retail sales across Britain drop in May and consumer morale continues to slide

UK consumers are gloomier than at height of pandemic or in 2008 financial crisis Retail sales fall as people cut back on food shoppingUK economy ‘running on empty’ as post-pandemic order books dry upTakeover of UK defence supplier Ultra Electronics set to be approved

May’s drop in retail sales follows a “triple whammy” of rising energy prices, spiralling food prices and a hike in National Insurance in April.

Maxim Syn, head of desk at global financial services firm Ebury, said these all dampened demand.

“Food prices in particular have seen big increases with Wednesday’s inflation figures showing food was the biggest contributor with bread, cereals and meat seeing the largest upticks.

This is down to rising wholesale food prices and the cost of raw materials.

The 0.5% m/m drop in retail sales volumes in May (consensus -0.7% m/m) was the third decline in four months, follows a downwardly revised rise in April and suggests that the fall in real incomes from higher inflation is starting to hit consumer spending harder.

More pain probably lies in store for the retail sector over the coming months, but that won’t stop the Bank of England from raising interest rates further.

520

754