UK Retail Sales Plunge 1.3% Piles Pressure on UK 100 as Economy Contracts

UK retail sales volumes fell 1.3% month-over-month in April, missing forecasts and extending the downturn that began with Iran-related shocks earlier in May. The decline follows May flash PMIs that showed the composite index contracting to 48.5 and services activity collapsing to a 64-month low of 47.9. Earlier shocks from the Iran conflict triggered a 53% drop in clothing manufacturers’ quarterly sales to £278,427 and erased £8bn from UK housebuilders’ market value. S&P Global now estimates roughly -0.2% Q2 GDP growth, highlighting stagflation risks that leave the Bank of England facing a major policy quandary and increasing downside pressure on the UK 100 index.