British retail sales plunged by a record 2.7% in May, the sharpest monthly decline since December 2023, largely due to a 5% drop at food stores and a 2.5% slump in household goods, contrasting with economists' 0.5% forecast. May's decline reversed a 1.3% rise in April, supported then by unseasonably sunny weather. Year on year volumes are down 1.3%, signaling weaker consumer demand. Though retail appears volatile month to month, the sharp drop points to a cooling economy. This follows subdued Q1 GDP growth of 0.7% and adds to signs of strain in the labour market that have shaped the Bank of England's cautious stance. Markets reacted swiftly: sterling slipped, UK two year gilt yields softened, and equity markets regained some ground amid renewed speculation of upcoming rate cuts.