CBI: Retail sales growth eases in May

| May 24, 2011 | 0 Comments

According to the latest Confederation of British Industry (CBI) distributive trades survey, retailers continue to be cautious about the economic outlook despite a rise in retail sales in May.

The CBI’s survey established that the sales balance fell to +18 this month from +21 in April – easily beating analysts’ expectation of a reading of +10.

However, the level remains below its long-term average.

Retailers expect sales growth to slow further next month, with the sales balance projected to fall to +14 as real wage growth fails to keep up with inflation.

Commenting on the figures, CBI Director-General John Cridland, said: “Household budgets are being persistently squeezed by the gap between price inflation and weak wage growth.

“Given these challenging consumer conditions, it is good news that retail sales growth is stable, not falling.”

The figures come after members of the Bank of England’s Monetary Policy Committee (MPC) continue to be in disagreement over monetary policy.

For several months now, three members believe interest rates should be lifted from their historic low of 0.5% to combat stubbornly high inflation.

However, others believe the recovery is still too fragile to hike interest rates.

In other news today, British retailing giant Marks & Spencer (M&S) reported a 13% rise in annual profits to £714.3 million.

However, despite the positive figures, the 127-year-old retailer which sells clothes, food and homewares, said the coming year will be challenging due to rising inflation and the Government’s spending cuts which will put pressure on consumers.

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