Sunny weather helped British retail sales rise more strongly than expected in June and shake off a gloomier start to the year, offering some signs that the economy as a whole might be regaining speed.
Britain’s economy went through a soft patch at the start of the year, and data since then have been mixed, as consumers feel the squeeze from higher inflation driven in large part by last year’s vote to leave the European Union.
The Bank of England is in the process of revising its economic forecasts, and in two weeks’ time will announce if it will raise interest rates for the first time in a decade.
Retail sales volumes rose by 0.6 percent month-on-month in June, beating economists’ forecasts in a Reuters poll for a 0.4 percent rise, the Office for National Statistics said, after falling 1.1 percent in May.
Looking at the three months to June as a whole, which smooth’s out monthly volatility in the data, sales rose by 1.5 percent, cancelling out a 1.4 percent drop in the first three months of 2017, the weakest calendar quarter since 2010.
A particularly warm June seems to have prompted strong sales in clothing, which has compensated for a decline in food and fuel sales this month.
Despite a surprise fall in inflation last month, prices are still rising at close to their fastest rate in four years, and weak wage growth means many households feel under financial pressure as Britain starts talks to leave the European Union.