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Tuesday, 6 June 2006, 10:00 GMT 11:00 UK

World Cup boost for UK retailers

English flag British retail sales rose in May, helped by better weather and the approach of the World Cup, according to the British Retail Consortium (BRC).

Like-for-like sales - which strip out the effect of new stores - rose by 3.6% compared with a year earlier.

Sales of large-screen televisions were especially strong in advance of the World Cup tournament.

The BRC said the figures were "superficially encouraging", but warned consumer confidence remained "fragile".

Retail sales in the March to May period were up 2.7% against the same period last year.

Rate warning

The BRC said that spring and summer items were boosted by warmer weather at the start of May, but deteriorating weather in the latter half of the month hit sales.

"The modest improvement in sales reported by some retailers reflects continued discounting, and while certain products are now in demand in anticipation of the World Cup, others remain heavily dependent on price cuts," said Kevin Hawkins, director general of the BRC.

He added that consumer confidence remained "fragile" and that an interest rate increase was "the last thing that either consumers or retailers need".

The Bank of England meets to discuss interest rates this week. While analysts are expecting rates to be kept on hold at 4.5% for the moment, there is increasing speculation that there could be a rate rise later this year.




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