Summer sales give high street a boost in July

Retail sales got a boost in July after an unexpectedly bad June as sale volumes rose by 0.1 per cent, reversing a fall of the same amount the previous month, official figures show.

Year on year the results were also positive, according to Sky News, with a jump of 4.2 per cent when compared to July of last year.

It is the 28th consecutive month of comparative growth, which is the longest sustained period since 2008.

Household goods, which include furniture and electrical appliances, fared particularly well, surging 13.4 per cent this year compared to July 2014.

This has been attributed to summer promotions and a strong housing market.

Online sales also increased by 13 per cent compared to July of last year, and accounted for 12.6 per cent of total retail sales.

Part of the reason for the boost may be the fact that wages are rising more quickly than inflation, meaning consumers have more money in their pockets to spend.

But although the news was good, it wasn’t as good as expected – economists had predicted the boost would be four times higher at 0.4 per cent.

Analysts have pointed to a fall in fuel sales as the reason the figures fell short of expectations.

Paul Hollingsworth, a UK economist at Capital Economics, said: “The prospects for retail spending remain bright.

“Real pay is rising strongly, unemployment is still low and the recent fall-back in the oil price and the forthcoming cut to gas prices should give households’ discretionary spending power another healthy boost.”

He added that the weaker than expected performance was not a cause for concern.

John Hawksworth, PricewaterhouseCooper’s chief economist, said: “Overall, the figures suggest that consumer spending will remain a positive contributor to economic growth in the third quarter, but at a more moderate pace than earlier in the year.”

The expected inflation increase at the turn of the year could impact upon the sales economy, as consumers face higher interest rates on mortgages and loans.