17 August 2012 10:12
Figures from the Office for National Statistics (ONS) have shown that promotions on petrol and high levels of discounting on the high street helped drive a surprise rise in retail sales in July.
Retail sales volumes rose 0.3% between June and July, the ONS said, defying expectations of a 0.1% fall. The figure for June was revised significantly higher to 0.8% from a previous estimate of 0.1% after additional information was received from retailers. The upward revision to June's data brings it more in line with industry reports which suggested that retailers benefited from the celebrations surrounding the Queen's Diamond Jubilee.
The revision means that retail sales volumes fell 0.3% in the second quarter of 2012, up from the previous estimate of 0.7%.
The period covered the first two days of the Olympics but the ONS said this had no noticeable impact on sales.
Meanwhile, there was welcome news for hard-pressed consumers after the ONS said shop price inflation slowed to 0.2% in July, its lowest rate since October 2009.
Economists had feared that sales volumes would be weaker in July amid anecdotal evidence that retailers had been forced to bring traditional summer sales forward to June in a bid to boost trade amid unseasonably bad weather at the start of the summer. But the figures suggest that continued discounting and improved weather in the second half of July helped boost trade.
Vicky Redwood, UK economist at Capital Economics, said: "The latest UK retail sales figures are pretty good – as much for the upward revisions to past months as for July's figure.
"What's more, sales should maintain this recent positive momentum in the near term as the boost from the Olympics comes through."
She believes August's figures will benefit from the feel-good factor around Team GB's success but fears sales may slow again later in the year.