* A very encouraging outturn for retail sales in May

* The retail sector appears to be on the path of a slow but steady improvement

* Today's figures bode well for growth in Q2 and support our view that the consumer sector will play a major role in the recovery this year

Nida Ali, economic advisor to the Ernst & Young ITEM Club, comments on today’s retail sales figures:

"A very encouraging outturn for retail sales in May, with the strong rebound more than offsetting the fall seen over the previous two months. These figures are in line with evidence from the BRC survey, which reported strong sales in May as well.

"The official figures have been unusually choppy over the past few months. Food sales – a sector that should be relatively stable regardless of prices and income – fell by almost 4% in April and rebounded by a similar amount in May. This looks very suspicious and distorts the broader picture. Nevertheless, looking through the monthly volatility, there appears to be a slow but steady improvement in the retail sector, supported by a gradual improvement in household spending power."

Mark Gregory, Ernst & Young's chief economist added:

"These figures bode well for GDP growth in Q2. Sales volumes in April and May combined are now above the Q1 average, implying that consumer spending will probably contribute positively to growth in the second quarter. This supports our view that the consumer sector will play a major role in the recovery this year."

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