The UK retail sales reading brought another disappointing episode for pound trading to shrink lower at the opening of European sessions.
According to the National Statistics Office (ONS), UK retail sales were unexpectedly recorded a significant drop in May with a decrease by 1.4% from an increase of 9.2% in the previous month.
Core retail sales (excluding fuel), reportedly shrinking 2.1% compared to 1.5% expected, and dropped sharply from the previous 9.1% reading.
Among the major factors caused this decline was due to the reduction in sales at food outlets that decreased by 5.7% and online sales decreased by 4.2%.
This is due to more easing of sanctions done in the hospitality sector, thereby encouraging consumers to re-eat and drink at locations such as restaurants and bars.
Following this disappointing reading, the Pound currency plunged lower by the price of 1.3860 against the strong US dollar.
Nevertheless, overall retail sales are still strong in the last two months, according to Ons.
In April and May, total retail sales were still 7.7% higher than March 2021 (before sanctions easing), and 9.1% higher than February 2020 before the COVID-19 outbreak hit the UK.
