UK Retail Sales Up In July

Sales on the high street have grown over the course of July, according to official figures released today.

The figures released by the Office for National Statistics show an increase in retail sales by 0.7% on the month, thought to be a direct reaction to discount and bargain offerings.

The rise from May is the biggest growth in retail sales since February this year, more than tripling analysts’ 0.2% forecast to suggest the retail sector is continuing to boom/

Year on year, retail sales have risen by 4.4% since July 2006 despite growing international economic concerns, and rising interest rates domestically putting pressure on household budgets and consumer spending power.

The Bank of England, having raised interest rates five times already this year, may take today’s figures into account when making its next rate decision.

Having turned from an almost certainty to an almost impossibility, analysts are now predicting that a further rate rise to 6% could be on the cards, if this data is thought to be indicative of the health of spending.

With consumer spending buoyant, inflation may pose a threat with continued retail spending. After the announcement earlier in the week that inflation had settled at an impressive 1.9%, today’s news may indicate the problem is not yet fully out of the picture.

And with the government eager to stick to its own target of under 2% for inflation, lifting interest rates to 6% might be the best, most certain way of maintaining the problem.

Amongst some of the sectors experiencing most growth was household goods, marking a 13.4% increase in sales on last year. With the largest growth in the sector in over six years, household goods sales have had a positive impact on the overall growth in consumer spending.

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