Retail sales in the U.K. as measured by a leading index have dropped for the first time in three months on signs that consumers are coming under increasing pressure from the uneven economic recovery, according to Bloomberg. On Tuesday, the Confederation of British Industry reported that the number of retailers in the U.K. reporting an increase in sales volumes during May from one year earlier outnumbered those reporting declines by a balance of 18 points. That reading was lower than the 21-point level recorded during April as consumer confidence slipped and unemployment claims surged by the largest amount in more than a year.
In the report, CBI director John Cridland said, “High street sales growth is subdued and is likely to remain sluggish for some time,” adding,” Household budgets are being persistently squeezed by the gap between price inflation and weak wage growth.” A gauge of expectations showed that retailers are bracing for another slowdown in June sales. Meanwhile, an index of selling price for the quarter through May dropp to 63 from the two-decade high of 73 posted in the three months to February, although the CBI said prices are growing at a rate “not seen since the early 1990’s.”