But June sales disappoint; economists see GDP growth at 0.8%
British retail sales rose between April and June at the fastest pace for a calendar quarter in 10 years despite stagnating last month, bolstering expectations that the economy has sustained its swift pace of recovery.
Retail sales volumes rose 1.6 per cent in the second quarter compared with the previous three months, a latest sign of strength in
Still, retail sales growth for June alone disappointed, rising just 0.1 per cent from May and by 3.6 per cent compared with a year ago, according to the
That was weaker than Reuters poll forecasts for increases of 0.3 per cent and 3.9 per cent.
The ONS said a fall in clothing sales during the month was probably the result of delayed price-cutting on summer clothes by retailers who normally hold sales in June but may have held off this year due to good weather.
With retail sales accounting for just under 6 per cent of British economic output, economists said the quarterly figure boded well for a first reading of
"The meagre growth in the official measure of
Tombs said the soccer World Cup was likely to have distracted many consumers from shopping last month and the previous six World Cup years have shown sales usually pick up again in July.
Sterling fell to a four-week low against the dollar following the weaker-than-expected monthly figures.
Wage growth, however, remains very weak.
Economists expect Friday's GDP numbers to show the economy grew 0.8 per cent from April through June, the same pace of growth as in the first quarter. There is a risk that growth could be slower than that after industrial output figures were weaker than expected in May and as wage growth continues to lag inflation - a crucial issue for the Bank of
Some business surveys and housing market reports over the last month have given tentative signs that the strong pace of economic growth might cool in the second half of the year.
"The broad trend for the quarter is still strong and the (retail) surveys suggest a good rebound in July. However, we do expect some softening in the
Prices in stores were flat last month, the first time they have not fallen since January.
An ONS official said an annual two per cent increase in prices for the textiles, clothing and footwear sector was unusual given that retailers normally cut prices during the month. The last time clothing prices rose in the month of June was in 2007.
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