UK retail sentiment falls in May at sharpest rate in 5 years - CBI

(Sharecast News) - UK retail sentiment fell in May at the sharpest rate in five years, according to a survey released on Tuesday by the Confederation of British Industry. The CBI's quarterly gauge of business sentiment fell to a net balance of -29% from -19% in February.

Meanwhile, the year-on-year retail sales balance dropped to -27 in May from -8% in April, while the measure for expected sales in June declined to -37.

CBI lead economist Ben Jones said: "This was a fairly downbeat survey and highlights some of the challenges facing the retail and wider distribution sector. In contrast to other recent retail data, this survey suggests parts of the sector are still struggling with fragile consumer demand, though online sales seem to be holding up better.

"Firms are also feeling the impact of higher NICs and the National Living Wage increase. Our quarterly survey suggests that retailers are cutting back on hiring, scaling back investment and expect to increase selling prices at the fastest pace for over a year.

"With the Spending Review on the horizon, the government has an opportunity to kickstart growth and incentivise investment, whether by reforming business rates, simplifying skills investment through the Apprenticeship Levy reform or expanding the Made Smarter Programme, further enabling digital adoption."