UK retail sales growth expectations hits 26-year high

British retail sales growth powered ahead in May, according to the latest report from the Confederation of British Industry (CBI). Meanwhile, expectations for sales next month hit their highest level in over 26 years.

The report showed the retail sales balance rose to 51 in May, much higher than forecasts and a sharp increase over April’s balance of 12. Furthermore, the measure of expected sales for June rose to 58 - the highest level recorded since September 1988.

Rain Newton-Smith, director of economics at the CBI, noted that “low inflation” gave households “a much-needed boost and greater spending power”.

For firms on the high street, the “overall outlook is bright”, he added.

Retailers were also optimistic about order volumes next month, as the balance rose to its highest since September 1996.

The data adds to last week’s upbeat report from the Office for National Statistics, which showed retail sales surged in April. Falling prices continue to be cited as a key driver behind the surge in consumer spending, especially as wage growth remains much higher than inflation.