United Kingdom economic growth slowed more sharply than expected in the first three months of the year, according to a detailed estimate from the ONS published last month, as consumers trimmed discretionary spending amid searing inflation and increased political uncertainty linked to the country's decision to leave the European Union last June.
It was the second monthly fall in the past three months and underscored that inflation remains a no-show for the slow-growing economy.
Prices had fallen 0.3 percent in March.
Britain's inflation continued its recent upward trajectory, reaching 2.9 percent in May, according to figures released by the Office of National Statistics Tuesday.
This outstrips the Bank of England's inflation forecast of 2.65% in May. Retail sales ex-autos were also down by the same amount and the control group (ex auto, gasoline, food service and building materials) was flat on the month. The BOE targets a 2 percent rate.
The ONS' troubling wage data comes just over a month after Bank of England Governor Mark Carney gave a stark warning about the state of the UK's household finances as Brexit driven inflation squeezes incomes.
Auto sales remained sluggish for the month, falling 0.2% in May, while sales at electronics and appliance stores saw their largest monthly decrease in more than seven years, falling 2.8% for the month. Growth slowed to 0.2 percent in the first quarter, partly because of weaker consumer spending, and the National Institute of Economic and Social Research estimates it hasn't picked up so far this quarter.
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He said: "After rising unexpectedly in May, we think that CPI inflation is now not far away from its peak".
And with inflation forecast to climb higher, United Kingdom households are likely to face a challenging time as their incomes come under further pressure in the coming months, according to Fidelity International.
In addition, the retail price index (RPI) rose by 3.7% last month, after increasing by 3.5% the previous month.
The central bank kept its benchmark rate at a record low near zero starting in late 2008 to try to boost consumer and business borrowing and lift the country out of the worst downturn since the 1930s. This was the highest inflation since 2013. By contrast, "doves" favor the direction taken under Chair Janet Yellen, favoring relatively low rates to maximize employment.
Clothing prices increased by 0.6% between April and May, compared with a decrease of 0.3% a year ago.
Meanwhile price hikes from utility companies sent the cost of electricity soaring four per cent, and comes after two of the big six energy providers - SSE and E.ON - introduced tariff increases at the end of April.
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