UK retail sales dip 0.2% weighed down by household, food and online sales

UK consumers spent less on household goods, petrol and food in June 2015, dragging down retail sales by 0.2% compared to May.

In comparison to June 2014, retail sales were up 4.7%, a strong annual growth rate according to the Office for National Statistics.

Paul Hollingsworth, UK economist at Capital Economics, said: "The slight slowdown in retail sales growth could just reflect consumers prioritising spending off the high street, and spending more on consumer services such as pubs and restaurants and leisure activities. Looking ahead, the prospects for spending look bright. Unemployment remains low and consumer confidence stands at a 15-year high."

UK inflation rate hovering around 0% was expected to fuel sales in June, but overall retail sales are still growing.

Online sales were down in June by 0.7% compared to May, according to figures given to IBTimes UK by PCA Predict.

Compared to June 2014, however, online retail sales jumped by 17.6%, with a 13 percentage point increase in mobile purchases.

Although the year-on-year increase in online sales exceeds the overall retail sales growth, online sales, too, is experiencing a growth slowdown.

Howard Archer, chief UK economist at IHS Global Insight, said that the figures might be softer than expected, but the fundamentals for the retail business and its consumers in 2016 are still healthy.

He said: "Earnings growth should strengthen further while consumer price inflation should still be relatively muted compared to past norms despite likely trending up gradually during the year."