Consumer spending slows again

Jul 25 2008 by Iain Laing, The Journal

THE biggest fall in retail sales on record has reversed a shock rise in May and suggested a consumer spending slowdown was gathering pace.

Retail sales volumes plunged 3.9% between May and June, official data showed, the biggest slump since records began in January 1986.

It came after a sunny weather-inspired 3.6% sales leap the previous month, which flew in the face of wider evidence that higher fuel bills and a weaker housing market were squeezing household budgets.

Economists said June’s data confirmed shoppers were increasingly reining in their spending, and would reduce pressure for the Bank of England to hike interest rates to bring down soaring inflation.

Clothing and footwear shops were the worst hit in June, with sales down 6.9%. Food sales also fell 3.6%.