British retail sales rose at their fastest annual rate in over two years in July as a heat wave boosted sales of barbecue food and outdoor items, adding to signs that third-quarter growth has got off to a strong start.
Retail sales volumes jumped 1.1 percent on the month, almost twice as fast as expected, to give an annual rise of 3 percent, the highest since January 2011, official data showed yesterday.
“Wow again. It’s hard to remember the last time a UK data release wasn’t stunningly positive,” said Rob Wood, the UK economist at Berenberg Bank. “Low interest rates, a sunnier outlook and rising house prices are getting consumers out consuming.”
Last week Bank of England governor Mark Carney said the bank would not raise rates until unemployment sank to 7 percent, which he forecast would take three years.
But many in the markets are betting a rate rise could come sooner – a view that was reinforced on Wednesday by robust jobs data and concern from one central bank policymaker that Carney’s guidance policy had inadequate safeguards against high inflation.
Britain’s economy grew an unusually rapid 0.6 percent in the three months to June, and some economists say third-quarter growth could be faster, with support to consumer morale from government schemes to aid house buying.
The Office for National Statistics said that feedback from supermarkets suggested the sunny weather had boosted sales of food and alcohol, with supermarket sales growing at the fastest annual rate since April 2011. – Reuters