Retail sales have not, after all, been crushed by inflation and the credit crunch.
Instead they rose by 0.8 per cent in terms of volume between June and July and by 0.7 per cent on the latest three-monthly comparison.
According to official numbers from National Statistics, sales in May to July were 3.9 per cent ahead of those in the same months last year.
These findings contrast sharply with those from the British Retail Consortium last week showing that sales fell by 0.9 per cent in July.
The Bank of England described evidence of retail trends as “mixed” in minutes of its interest-setting committee’s meeting earlier this month. In the past it has tended to prefer survey evidence to numbers from NS, when there have been conflicts like this. NS itself warns against putting undue stress on the numbers for any single month.
Nevertheless, this finding that sales have been rising, not falling on a three-monthly basis despite the falling buying power of average incomes strengthens the hand of Tim Besley and other “hawks” on the Bank’s committee who are more inclined to raise interest rates than to cut them.
“Several data series are becoming unforecastable,” said Ross Walker a Royal Bank of Scotland economist. “I don’t think there is a great risk of a major (interest rate) policy error, but it probably does mean that it increases the chances of an error. The bigger risk is it delays policy from becoming pre-emptive.”
Shops specialising in household goods did suffer from the financial crisis that has stalled activity in the housing market. They had their worst month since July, 2005, with sales 3.1 per cent down on July last year.
“Non-specialised” retailers – mostly department stores – fared worse, with sales down 4.1 per cent year on year, due possibly to a lack of house-buyers shopping to fit out their new homes.
But even that setback may have been temporary. The John Lewis Partnership, represented in the West Midlands by a flagship store in Solihull, yesterday reported a 9.3 per cent increase year on year in its sales during the week to August 9.
That was driven by a 14.7 per cent gain in electrical and technical goods and one of 13.7 per cent in fashions.
Overall non-food sales outpaced those in supermarkets and other food shops. Non-food sales in the latest three months were 4.3 per cent higher than in May/July last year, while food sales rose by 2.2per cent.