Shoppers splashing out on new summer clothes and sports goods boosted monthly growth in high street sales to its highest level for more than a year, official figures showed yesterday.
A pick-up in fashion sales by clothing stores and strong sales by sports retailers pushed up the volume of retail sales in June by 1.3 per cent from a revised growth level of zero in May, according to official data from the Office for National Statistics.
It represented the highest growth in monthly sales volumes since the 1.4 per cent recorded in December 2003, the ONS said.
The volume of retail sales in the three months from April to June was 0.7 per cent higher than in the previous three months, the highest such growth since November 2004.
But growth in retail sales volumes between April and June compared to the same three months a year ago remained at its lowest level for more than six years, rising by 1.6 per cent.
And the value of retail sales in the three months to
June was 0.4 per cent higher than in the same period a year earlier, the lowest growth since comparable records began after the Second World War.
There were increases in sales volumes during June for all sectors, with the growth driven by some department stores reporting a shift in sales to July from June, as well as by clothing and sports stores.
The figures are likely to compound the dilemma faced by the Bank of England's Monetary Policy Committee in deciding its next move on interest rates.
On Wednesday, the minutes of the MPC's meeting this month revealed that the committee had almost approved a cut on the day of the London bomb blasts.
David Jew, Midlands retail director, Barclays Business Banking, said: "Retailers are experiencing clear pressure and lack of footfall with the underlying three- month trend deteriorating still further last month.
"Consumers are certainly showing much more discretion in their spending. At the top end of the spectrum, where products match aspirations then income is not the main issue. At the lower end, consumers need to be tempted to buy." Managing economist at the Centre for Economics and Business Research, Dominic Walley, said the apparent surge in sales volumes last month should be treated with caution.
" The housing market remains flat, wage inflation fell in May to 4.1 per cent, the lowest since October 2004, and claimant count unemployment is rising slowly," he said.
"With what appears to be little cheer for the consumer, the data may be just a blip."
Mr Walley said the MPC was still likely to cut interest rates in August, although the figures would make it more cautious.
Standard Chartered Bank economist Gavin Redknap said there was little doubt that better weather and an early start to the summer sales helped the growth in retail sales volumes in June.
Mr Redknap said one month's strong data was unlikely to deflect the Bank of England from easing rates after the MPC had given a clear indication of its intentions.
"Yet the data should ease fears that the UK consumer sector has fallen off the edge of a cliff," he said.
"A 25 base-point rate cut next month should inject further dynamism into an already recuperating housing market, reversing the slowdown in consumer activity seen earlier this year.
"That suggests to us that a rate cut in August will be a one-off this year, rather than the start of a protracted easing cycle."
Ross Walker at Royal Bank of Scotland said the figures suggested consumer demand could be recovering and that the MPC may hold off from successive rate reductions later in the year and in 2006.
He added: "These data are unlikely to prevent a rate cut in August."