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UK retail sales slump to 10-year low in May, but rebound expected in June

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UK retail sales slump to 10-year low in May, but rebound expected in June

U.K. retail sales volumes in May declined to their lowest level in a decade, but volumes are expected to climb in June, according to the Confederation of British Industry's distributive trades survey.

Sales volumes, adjusted for the time of year, yielded a balance of negative 40 percentage points, the lowest reading since March 2009.

Of the retailers surveyed, 26% said their sales volume in May rose year over year, while 53% said volume declined, yielding a net balance of negative 27 percentage points. The Econoday consensus estimate was for a balance in May of positive 8 percentage points.

Confederation of British Industry Deputy Chief Economist Anna Leach said retailers faced Brexit uncertainty, challenging trading conditions and outdated business rates. These factors weighed on investor intentions, which weakened to their lowest balance ever.

The volume of orders placed with suppliers in the year to May declined at their fastest rate in 19 months. Employment declined year over year at the sharpest decline since August 2009.

In addition, wholesalers recorded a decline in sales for the first time in nearly three years. Motor trades logged the steepest fall in sales volumes since December 2011, with expectations for a further fall in June.

Nonstore retailing was the only subsector to record sales growth.

Twenty-six percent of respondents project a rebound in sales in June, while 19% anticipate a drop, yielding a balance of positive 7 percentage points.

The Confederation of British Industry's survey includes 90 companies, of which 42 were retailers.