It was mixed economic news coming from the UK on Monday as UK retail sales posted a surprise monthly decline whilst UK house prices rose the most seasonally since 2015.
UK Retail Sales
According to official data released by the Office for National Statistics, UK retail sales declined unexpectedly in May as a lifting of lockdown restrictions boosted spending in restaurants rather than shops. Food stores suffered the most, recording a 5.7% fall in sales.
UK Retail sales declined 1.4% between April and May, lower than the 1.6% predicted by market analysts.
The ONS said in an accompanying statement:
“Anecdotal evidence suggests the easing of hospitality restrictions had an impact on sales as people returned to eating and drinking at locations such as restaurants and bars,”
However, in annual terms, the UK retail sales figures do not look so bad. In annual terms, retail sales were 24.6% higher than at the same time last year. Although this was still lower than the market expectation for a 29.0% increase.
UK House Prices
As UK Retail sales figures disappointed, asking prices for British homes between mid-May and early June recorded the largest rise for the time of year since 2015.
According to data from property website Rightmove, asking prices rose by 0.8% compared with a month before,
May’s increase is lower than the 1.8% posted a month earlier. However, it still takes asking prices 7.5% above their pre-pandemic level in March 2020.
The UK’s official measure of house prices, based on completed transactions, showed prices in the year to April increased 8.9%, following a 9.9% increase for the year to March.
Tim Bannister, Rightmove’s director of property data, said:
“Buyer demand remains very strong, though, with an all-time low in the number of properties available for sale … and new stock at higher-than-ever average prices, there are early signs of a slowing in the frenetic pace,”
