World Cup fails to lift UK retail sales in June

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England supporters in Manchester.
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The hunger for barbeques and World Cup-fever failed to lift retail sales in June as shoppers stayed away from the High Street.

The Office for National Statistics said sales fell 0.5% between May and June, below expectations of a 0.2% rise.

The pound fell against the dollar in response, dipping below $1.30.

ONS senior statistician Rhian Murphy said: “Consumers stayed away from stores and instead enjoyed the World Cup and the heatwave.”

Keith Richardson, managing director retail sector at Lloyds Bank Commercial Banking, said: “While the World Cup definitely got shoppers spending, these figures don’t cover the sudden rush of optimism that came with England’s progress beyond the initial group stage.

“What they do show is how challenging the retail sector is at the moment. Even the longest heatwave that many shoppers can remember hasn’t been enough to persuade consumers to really open their wallets.”

In the year to June, retail sales rose by 2.9%, although that was a slowdown from the 4.1% annual increase recorded in May.

However, in the April-to-June quarter retail sales increased by 2.1% – the biggest quarterly rise in 14 years.

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The royal wedding boosted retail sales in the second quarter of the year

Ruth Gregory, senior UK economist at Capital Economics, said: “Some of the second-quarter’s strength reflects temporary factors, such as a boost from the warm weather and the Royal Wedding celebrations.

“Crucially, though, the big constraint on spending – namely the squeeze on real wages from high inflation – has eased.”

Economic data out earlier this week showed that while wage growth has slowed to 2.7%, it remains above inflation, which stayed at 2.4% in June for the third consecutive month.

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