UK shop sales higher than expected

UK retail sales increased slightly more than analyst predications last month, giving a clear sign the consumer spending hasnt been affected by the rise in interest rates.

Sales rose 0.4% in May compared with the month before, recovering from April's 0.1% fall, said the Office for National Statistics. It added that on an annual basis, sales rose 3.9% last month.

UK interest rates are now at 5.5%, after having been increased four times since last August to rein in inflation.

All retail sectors showed an increase in sales last month except textiles, clothing and footwear, which were 2.5% down on April.

Household goods sales were particularly strong last month, increasing 2.9% on a rise in the number of people buying DIY equipment.

The markets expected overall retail sales to expand 0.3% in May.

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