UK retail sales up but jobs lost

More than a third of retailers reported better May trading

UK retail sales volumes rose at their fastest pace in one-and-a-half years in May and are set to rise faster in June, business group the CBI says.

The CBI's monthly distributive trades survey's monthly sales balance rose to +9 in May from +2 in April.

More retailers taking part in its survey reported that sales volumes were up (36%) on a year ago than said they were down (27%).

But retail jobs went at the sharpest pace in the survey's 23-year history.

World Cup effect

The CBI says the job losses reflect difficult trading conditions and continued pressure on retailers to cut prices.

However retailers expect sales to keep rising next month, with the expectations balance for June rising to +12, the highest since March 2005.

"Let's hope that retailers' cautious optimism becomes a reality, with a successful World Cup stimulating demand," said John Longworth, chairman of the CBI's survey panel.

There were increased sales of large electrical items, such as televisions and fridges, which may be linked to preparations for the World Cup.