Retail sales rose by a sunnier 2.9% in May 2024, according to this morning's perspective from the Office for National Statistics.

The rise followed a fall amid bad weather of 1.8% in April 2024, a figure which the ONS said had been subsequently revised up from 2.3%. In reaction, the pound saw an immediate rise in Friday morning's trading.

However, on the back of the Bank of England's decision yesterday to not lower lending rates below 5.25%, today's sales bounce also arrives alongside findings from S&P Global which suggests pre-election nerves in the service sector triggered a seven-month low for growth, with activity across the private sector also at its lowest since last November.

Service sector firms have indicated that the slowdown is partly driven by a pause in client spending decisions since Prime Minister Rishi Sunak wrongfooted most pundits and called an early vote for July 4th.

Sales volumes monitored by the ONS rose across all sectors in May, with clothing retailers and furniture stores "rebounding" in the wake of April's poor weather. Pointing to climate charts form the Met Office that entend back to 1884, the ONS added that the uptick of activity in May matched the warmest May on record.

A spokesman added: "More broadly, sales volumes rose by 1.0% in the three months to May 2024 when compared with the previous three months. However, they fell by 0.2% when compared with the three months to May 2023."

The figures are likely to be seized upon by Conservative campaigners as the election campaign moves into the final fortnight. 

But, as well as S&P global's update, the ONS has also dropped new figures on borrowing. Excluding public sector banks, a net total of £15bn was borrowed in May - a figure that was £0.8bn more than the same month in 2023 and which marked the third highest public sector May borrowing on record. It was also the highest monthly borrowing since the Pandemic.

In its retail focus, ONS sector-by-sector analysis suggests clothing, footwear and textile stores were the big winners, registering more than 5% in volume sales growth, and being beaten only by non-store retailing.

The least impressive bounce was seen in household good stores, while food shopping also lagged significantly behind automotive, department stores and other non-food retail.

Non-store retailers, which are predominantly online retailers, rose by 5.9% on the month, which was the largest monthly increase and index level since April 2022. The ONS added: "Commodity breakdown data indicated that the increase in May 2024 was because of strong clothing and other non-food sales."

In a statement, the Federation of Small Businesses said that yesterday's BoE decision to hold firm on the base rate at 5.25% was "disappointing" for small firms.

An FSB spokesperson said: "Inflation is now back on target, and holding off a cut in the base rate risks snuffing out tentative signs of a recovery in GDP, with the flat growth in April a warning sign."

Alpesh Paleja, Interim Deputy Economist at the CBI, echoed the disappoinment.

He said: Recent data has been a bit of a mixed bag: while inflation is falling and the labour market is loosening, wage growth remains stubbornly strong andsetvices inflation is higher than the Bank's forecast. "

He added that the CBI expected a cut by August, but it anticpated any downward moveent to be gradual.