FX.co ★ UK Retail Downturn Eases in May

The CBI retail sales balance improved to -46 in May 2026 from -68 in April, beating market expectations of -60. Retailers anticipate a further moderation to -36 next month. Despite the improvement, sales remained below seasonal norms and demand stayed weak. Retail sentiment remained negative for a second consecutive year, although conditions deteriorated more slowly than in previous quarters.

Retail selling price inflation eased to its slowest pace since February 2025, with the balance falling to 28 from 41. Retailers also signalled additional cuts to investment and hiring plans, with capital expenditure expectations dropping to their weakest level since February 2025. Employment in the sector continued to decline, albeit at a slower rate.

CBI economist Charlotte Dendy noted that the slowdown in price growth underlines subdued consumer demand and cautioned that firms remain under pressure from elevated operating costs. She called for reforms to business rates, lower energy costs, and reduced regulatory burdens to help support the sector.