LONDON (Reuters) - Retail sales grew slightly more than expected in May and shops are looking to raise prices at the fastest rate in eight years, a survey showed on Thursday.
The Confederation of British Industry said its distributive trades survey’s reported sales balance eased to +31 this month from a two-year high of +44 in April. Analysts had predicted a reading of +30.
But policymakers are likely to be more concerned over further evidence that businesses are ramping up prices and the survey is likely to reinforce expectations that the Bank of England will hike interest rates again soon.
The CBI’s quarterly reported selling prices balance rose to +33 in May from +16 in February, the highest since May 1998.
Furthermore, retailers are expecting to raise prices further in the next three months, with that balance hitting +23, its highest since February 1999.
Retailers are expecting sales growth to ease slightly but remain strong in June, the CBI said.
“Retailers’ expectations reveal that the impact of the recent interest rate rises might yet cause consumers to tighten their belts,” said John Longworth, head of the survey’s panel.