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Last Updated: Thursday, 24 July, 2003, 08:49 GMT 09:49 UK
Summer boost for UK retailers
British retail sales bounced back last month as shoppers rushed to buy barbecues and light clothing amid record summer temperatures, new figures have shown.

The Office for National Statistics said retail sales jumped by 1.9% in June compared with the previous month, and were up by 6% on the same period last year.

The monthly rise was the sharpest since November 2001, when retail sales rebounded after a sharp fall in the wake of the 11 September attacks.

The latest figures will help dispel recent fears of a sharp slowdown in consumer spending, and are likely to reinforce the case against further interest rate cuts.

"This adds to the evidence that the MPC is not going to move in August," said George Buckley, UK economist at Deutsche Bank.

The Bank of England last cut borrowing costs on 10 July, reducing the base rate by a quarter of a percentage point to a 48-year low of 3.5%.

The latest figures contrast sharply with the ONS retail sales survey for May, which revealed a 0.1% dip in sales from the previous month.

A downbeat retail sector survey from the Confederation of British Industry earlier this month triggered further warnings that the UK's long-running consumer boom was about to run out of steam.

UK consumer spending, fuelled by soaring house prices, low interest rates, and high levels of employment, has remained persistently strong over the past three years despite a downturn in the global economy.

A prolonged downturn in retail sales could signal trouble ahead for the wider economy, which now depends for much of its growth on consumers' willingness to spend.




SEE ALSO:
Sunshine boost for retail sales
15 Jul 03  |  Business


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