UK retail sales fell by 2.7% in May, marking the biggest fall since 2023.

According to the Gate News bot, Bloomberg reports that UK retail sales have experienced their largest fall since 2023, with a sharp reversal in consumer spending, suggesting that the economy may be in trouble in the second quarter.

The UK Office for National Statistics stated on Friday that retail sales, both online and offline, fell by 2.7% in May, far exceeding economists' expectations of 0.5%.

Despite a strong start to 2025 for the UK retail sector, the surge in sales driven by good weather and rising real wages came to an abrupt halt. The fall in May completely reversed the upward trend seen since the beginning of the year.

Weakness in the retail sector will exacerbate the resistance faced by the UK economy in the second quarter after strong growth in early 2025. Despite a 0.7% growth in GDP( in the first quarter, the economy contracted in April, and forecasters expect a significant slowdown in the second quarter.

Data shows that retail sales fell more than expected, causing the pound to reduce its gains, rising 0.1% on the day to $1.3484.

This has caused trouble for the Labour government because it needs to boost the UK's weak economic growth rate to maintain its spending commitments. A loophole in the government's fiscal plan may lead to Chancellor Rachel Reeves) imposing further tax increases in the next budget expected to be released in November.

The UK Office for National Statistics ( ONS ) stated that the decline in May was due to a fall in food sales of 5%, with a general weakness in the retail sector. Sales in household goods stores fell by 2.5%, and sales of clothing and footwear fell by 1.8%.

Rajeev Shaunak, the head of consumer business at accounting firm MHA, stated: "Growth momentum is slowing due to ongoing inflationary price pressures, international trade disruptions, and cautious consumer sentiment."