UK Retail Sales Jump 1.2% in May, ONS Data Shows

British shoppers spent more in May than economists had expected. Retail sales volumes rose 1.2% from April, the Office for National Statistics reported Tuesday, beating the 0.5% median estimate in a Reuters poll. The gain was the largest monthly increase since January.

Sales volumes for the three months through May were up 0.4% compared with the prior three-month period, the ONS said. That measure smooths out monthly volatility and gives a cleaner read on the underlying trend.

Non-food stores drove the May jump. Department stores and household goods retailers reported the strongest gains, the ONS said. Food store sales edged up 0.3% on the month. Fuel sales fell 0.7%, reflecting lower pump prices.

Online sales as a share of total retail spending slipped to 26.3% from 26.5% in April, the data showed. That is still above the pre-pandemic average of roughly 20%.

The May print follows a flat reading in April and a 0.5% decline in March. The three-month average of 0.4% is roughly in line with the pace of consumer spending growth the Bank of England has projected for the second quarter.

Traders in the gilt market barely moved on the release. The 10-year yield held at 4.21%, little changed from Monday's close. Sterling edged up 0.1% against the dollar to $1.2720.

The data gives the BOE some room to hold rates steady at its next meeting in August. Governor Andrew Bailey has said the committee needs to see sustained evidence that demand is cooling before it cuts the base rate from 4.75%. A string of strong retail prints would argue against an early move.

The next major UK data point is the June CPI release, due July 16. The BOE's August decision follows on Aug. 7.