Retail sales rise ahead of Q2 growth figures

Category: Economy
Date: 7/22/2010

Retail sales in the UK rose strongly in June, fuelling hopes that tomorrow's gross domestic product (GDP) figures will show strong growth.

The volume of UK sales increased by 0.7% in June compared with May and 1.3% on 12 months ago.

Discounting fuel sales, the volume of sales registered a 1.1% rise in the last month, and 3.1% over the last year.

The strong gains have been driven by increased sales of household goods and general stores, with figures from the Office for National Statistics showing rises of 1.6% and 1.5% respectively.

It was also revealed that retail sales actually increased by 0.8% in May, more than had previously been thought.

"These figures were stronger than expected, although they may have been artificially inflated by World Cup related spending.

"Taking the data for the second quarter as a whole, we expect the Q2 GDP estimate to show an improvement in the pace of growth," commented David Kern, chief economist at the British Chambers of Commerce.

"While the recovery in consumer spending is welcome, there is no room for complacency. The economy is still weak, businesses are struggling, and the full impact of the emergency Budget's austerity measures are yet to take effect.

"Risks of a setback remain serious and it is important for the MPC and the government to concentrate on supporting business growth and the fragile recovery."