Belfast Telegraph

Heatwave fails to cool retail growth, data shows

By Roger Baird

Retail sales showed a meagre rise in June amid the longest period of sustained growth since before the recession, official data showed.

Sales volumes were up 0.1% in the month, compared with a 0.5% dip in May, despite hot weather and the distraction of the World Cup.

The figures from the Office for National Statistics showed sales in the latest three months were up 1.6% on the previous period, the 16th consecutive quarter of growth.

Volumes were up 3.6% year on year, compared with 3.9% in the previous month. Meanwhile, the amount spent online increased 13.4% compared with last year, although this fell slightly by 0.1% against May.

Despite the latest improvement in the headline figure, the monthly growth was below the 0.3% volume growth predicted by economists.

ING Bank senior economist James Knightley said the monthly figure was "a little weaker than hoped".

But he added that the quarterly trend continued to support the view from the Bank of England that the economy is maintaining its positive momentum.

The data comes after Wednesday's CBI monthly retail figures showed that sales growth quickened in July.

The UK's economy has been growing this year, driven by consumer spending and rising house prices, although sluggish wage growth threatens this progress.

IHS chief UK economist Howard Archer said: "It is questionable how strong consumer spending can be on a sustained basis until earnings growth picks up appreciably."

"The missing link as far as consumers are concerned is decent earnings growth, while there may also be some concern at the increased speculation of an interest rate hike before the end of 2014."

Belfast Telegraph