Following an unrevised 2.9 percent monthly jump in May, retail sales gave back more ground than expected at quarter-end. Volumes declined 1.2 percent on the month, three times the market consensus and their third fall in the last four months. Annual growth was cut from 1.7 percent to minus 0.2 percent but purchases only stand at a 2-month low. Excluding auto fuel, the picture was rather weaker with sales down 1.5 percent versus May.

June's monthly setback was broad-based as food was down 1.1 percent, fully reversing May's bounce, and non-food 2.1 percent. Within the latter, there were sizeable declines in all of the main categories, notably non-specialised stores (3.4 percent) and household goods (2.1 percent). Elsewhere, non-store retailing also decreased 1.1 percent but auto fuel advanced 2.2 percent.

Today's update may have been biased down by poor weather and some loss was all but guaranteed after the May surge. Still, with overall volumes dipping 0.1 percent on the quarter, the underlying picture looks rather soft. Indeed, today's surprisingly weak reports trim the UK RPI to minus 30 and the RPI-P to minus 32, both measures showing economic activity in general now running quite well behind market expectations. Ahead of the August MPC meeting, financial markets are likely to remain uncertain about when the BoE will deliver its first cut in Bank Rate.

Sales rebounded a sharp 2.9 percent on the month in May after slumping 1.8 percent in April and recording close to growth in the prior two months. Forecasters see June falling back with a 0.4 percent decline.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The data include all internet business whose primary function is retailing and also cover internet sales by other British retailers, such as online sales by supermarkets, department stores and catalogue companies. Headline UK retail sales are reported in volume, not cash, terms but are available in both forms. The data are derived from a monthly survey of 5,000 businesses in Great Britain. The sample represents the whole retail sector and includes the 900 largest retailers and a representative panel of smaller businesses, including internet sales. Collectively, all of these businesses cover approximately 90 percent of the retail industry in terms of turnover.

With consumer spending a large part of the economy, market players continually monitor spending patterns. The monthly retail sales report contains sales data in both pounds sterling and volume. UK retail sales data exclude auto sales.

The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps apparel sales are showing exceptional weakness but electronics sales are soaring. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.