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Small rise in retail sales as World Cup fever fades

The high street avoided a World Cup hangover in July as retail sales volumes climbed 1.1%, official figures reveal.

The better-than-expected performance represented the highest month-on-month rise since February, the Office for National Statistics (ONS) said.

A strong rise in volumes for a broad mix of retailers, including sports equipment and jewellery shops, offset a flat month for department stores and lower household goods sales, the ONS said.

Graeme Maclaughlin, relationship director at Barclays Corporate Northern Ireland, said: "Despite a strong month for sales volumes, retail sales remain broadly unchanged compared to the end of last year.

"However, sales of technology products remain steady. Currency exchanges continue to favour sterling over the euro, and the cross-border trade enjoyed by retailers in the border counties is beginning to return to normality."

Inflation figures on Tuesday showed the biggest slide in clothing and footwear prices for eight years between June and July.

But sales volumes from food stores were down 1% month-on-month as the impact of the World Cup faded, while prices also rose. Household goods stores saw volumes fade 0.7% month on month as the pre-tournament boom in flat-screen televisions faded slightly.

Overall sales volumes were up 1.3% on a year earlier, although concerns remain over the prospects for the high street as the Chancellor's austerity measures loom.

VAT is set to be hiked to 20% in January as part of the coalition's deficit-busting package, while looming public sector belt-tightening and fears over unemployment are also likely to dent consumer confidence.

David Kern, chief economist at the British Chambers of Commerce, warned against complacency.

He said: "The economy is still weak, businesses are struggling, and the full impact of the emergency Budget's austerity measures are yet to take effect.

"Risks of an economic setback are significant, and it is important for the Government and Monetary Policy Committee to focus on supporting business and securing the recovery."