"A recovery in the U.K. economy may be taking root"
- Martin Beck, an economist at Capital Economics Ltd.
Britain's retail sales bounced back more than initially was expected in May, as consumers spent more online and on food, adding to evidence of acceleration in economic growth in the second quarter of 2013 and providing some relief for the central bank. The Office for National Statistics said that volumes surged 2.1% from April, when the dropped 1.1% and strongly outpacing forecast for a 0.8% growth. Data also showed that sales volume reached a record in May, boosted by a 3.5% gain in food sales, the highest since April 2011, while sales in non-store retailing jumped 4.3%. Meanwhile sales of fuel rose 1.7%, while sales of clothing and household goods increased as well. Overall retail sales increased 1.9% on a yearly basis, while climbed 0.7% in the latest three months.
The data is adding to signs the economic recovery is taking hold, even despite the fact consumers remain under pressure, as inflation rate accelerated further and outpaces pay growth and as consumers are continuing to suffer from government spending cuts. However, some economists are questioning whether economic indicators are suggesting a broad-based return to growth, and they are leaving the door open for the new Governor of the Bank of England Mark Carney to push for another cash injection for the economy.
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