British retail sales strengthen in June: official data

22nd July 2010, Comments 0 comments

Retail sales in Britain rose by 0.7 percent in June compared with an upwardly-revised 0.8-percent gain in May, official data showed on Thursday, as retailers were boosted by the World Cup.

They climbed by 1.3 percent in June compared with 12 months earlier, the Office for National Statistics (ONS) added in a statement.

"Retail sales performed well in June -- even if England's football team did not -- as they were lifted by the World Cup, good weather and evidence of increased discounting," said IHS Global Insight economist Howard Archer.

Market expectations had been for a monthly gain of 0.4 percent, while the year-on-year gain was in line with analysts' forecasts.

"UK retail sales are proving to be remarkably resilient," added ING economist James Knightley.

He added: "It therefore appears that the World Cup boosted sales, despite falling consumer confidence and budget uncertainty with regard to taxes and government spending."

Thursday's upbeat figures were issued one day before the first official estimate of British gross domestic product (GDP) for the second quarter, or three months to the end of June.

"The retail sales data raise hopes that GDP growth could surprise on the upside when the data are released on Friday," added Archer.

British GDP expanded by 0.3 percent in the first three months of 2010, building on its modest emergence from recession at the end of last year.

However, some economists warn that the coalition government's deficit-slashing tax hikes and public spending cuts could hamper the fragile economic recovery.

Knightley forecast that the economy grew by 0.5 percent in the second quarter -- but sounded a cautious note.

"With consumer confidence having weakened so much, and significant fiscal austerity on its way, this is likely to mark the high point for growth for several quarters," he said.

© 2010 AFP

0 Comments To This Article