UK retail sales rebound in July as spending on food increases

UK retail sales rebounded in July as consumers boosted spending on food, clothing and footwear, the Confederation of British Industry said.

A gauge of annual sales growth increased to 21, the highest since April, from 4 in June, according to an index by the CBI published today.

There was also strong growth in sales of furniture, carpets and specialist food and drink, the report showed.

An economic recovery driven by rising consumer confidence and a surging housing market has put Britain on course for its strongest growth since the financial crisis.

Some Bank of England policy makers have started to argue that the risk of rate increase undermining the recovery are dimishing, minutes of their July meeting published today showed.

“Retail sales growth accelerated in the year to July, after coming to a near halt in the previous month,” the CBI said.

Retailers see business strengthening further in August, with an index of expected sales rising to 36 from 17 in July, the CBI said. Stocks climbed to record levels relative to expected demand this month and orders placed on suppliers are expected to pick up.

The weakest sales this month were seen at pharmacies, the CBI said. Strong growth in sales of vehicles is expected to slow as suppliers receive fewer orders. The CBI said 66 retailers responded to the survey, which was carried out between June 25th and July 15th.

Bloomberg