the UK slowed in June to one of its weakest rates in three years.The British Retail Consortium said total retail spending in June was only 0.6 per cent high than the previous June. This equates to the lowest growth rate since May 2011, if annual volatility caused by the timing of Easter is excluded.
One possible reason for this could be that people are responding to fears of higher interest rates. There is a fear that the Bank of England will raise their interest rates later this year from their record low of 0.5 per cent.
Although second quarter sales were encouraging overall, with a rise of 2.6 per cent, this figure was bolstered by the fact that Easter fell in the second quarter this year and the first quarter in 2013.
Food sales for the second quarter fell by 2 per cent on the year and non-food sales rose by 3.6 per cent. Helen Dickinson, director general of the BRC, said that although food sales are still in decline "the lower pricing policies we have witnessed are good news for consumers who are set to continue to benefit from keen bargains in their shopping baskets."
Other reasons given for the low growth were England's early World Cup exit and a supermarket price war which saw a 1.8 per cent fall in high street prices last month, the largest fall since around 2006.
According to David McCorquodale, head of retail at KPMG, the retailers face a tough two months of comparables as sales last year were boosted by Murray winning Wimbledon, a heat-wave and the arrival of the royal baby.
