UK retail sales volumes tumbled in May, official figures have revealed, adding to worries over the impact of falling real pay on struggling consumers, writes Ian McConnell.

The figures, published yesterday by the Office for National Statistics, show retail sales volumes dropped by 1.2 per cent month-on-month in May. The City had forecast a 0.8 per cent fall. The year-on-year pace of increase of sales volumes slowed to just 0.9 per cent in May, from 4.2 per cent in April.

Food stores’ sales volumes dipped 0.9 per cent month-on-month in May. Sales volumes in the non-food category dropped by 2.3 per cent.

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Official figures this week showed annual UK consumer prices index inflation rose to 2.9 per cent in May. It was at 0.3 per cent in May 2016. The surge in inflation has resulted in the sharpest year-on-year falls in regular pay in Great Britain since summer 2014.

Royal Bank of Scotland senior economist Sebastian Burnside said: “The squeeze on the high street intensified in May… This isn’t a one-off. It’s part of a trend of higher prices eroding purchasing power. Spending was 4.1 per cent higher than May last year but, with prices rising much faster, the extra spending only yielded an increase in the quantity bought of 0.9 per cent.”

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