LONDON (dpa-AFX) - UK retail sales recovered in June as warm weather boosted consumer spending but consumer sentiment weakened amid fears of possible tax rate hikes, data showed Friday.
Retail sales grew 0.9 percent on a monthly basis, in contrast to the revised 2.8 percent drop in May, the Office for National Statistics reported. However, this was weaker than economists' forecast of 1.2 percent gain.
Excluding auto fuel, retail sales advanced 0.6 percent, reversing a 2.9 percent drop in May. Economists had forecast an increase of 1.2 percent.
Food store sales gained 0.7 percent driven by improved sales volumes in supermarkets. At the same time, non-food store sales grew only 0.2 percent.
Automotive fuel sales increased 2.8 percent, marking the largest monthly rise since May 2024.
Following two consecutive falls, online sales rose across most sectors in June, the ONS said. Online spending values grew 2.3 percent in June from the previous month.
Retail sales volume advanced 1.7 percent from the previous year, following a 1.1 percent decrease in May. This was slightly weaker than forecast of 1.8 percent.
Excluding auto fuel, retail sales rebounded 1.8 percent after falling 1.2 percent in the previous month. Sales were forecast to grow 2.0 percent.
'June was a good month for much of UK retail, as the warm, sunny weather got people spending,' British Retail Consortium Director of Insight Kris Hamer said.
'Sales of food and drink also performed well, and while this was in part driven by rising inflation, the warmer weather and packed sports schedule also encouraged more social gatherings,' Hamer added.
British consumer sentiment weakened in July as households were more concerned about possible tax hikes in the autumn budget, a survey published jointly by GfK and the Nuremberg Institute for Market Decisions showed Friday. The consumer sentiment index slid one point to -19 in July, in line with expectations.
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