Spurred on by a raft of store discounts, retail sales on the UK’s high streets rose by 0.2 per cent during June.
Official figures from the Office for National Statistics confirmed that the increase represented a 2.2 per cent jump from a year earlier, ahead of consensus forecasts of 1.7 per cent.
Despite a drop from May’s 2.1 per cent, the latest figures are likely to further boost hopes of a sustainable economic recovery in the UK.
Commenting on the latest figures, Howard Archer, chief UK and European economist at IHS Global Insight says: “While retail sales held up well in June, there are still significant uncertainties about the prospects for consumer spending going forward.
”While elevated employment and improving confidence are encouraging for consumer spending prospects, purchasing power is currently being constrained by very low earnings growth and higher inflation. Indeed, consumer price inflation of 2.9 per cent in June was essentially three times underlying annual earnings growth of 1 per cent in the three months to May.”
Earlier this week the Ernst & Young Item Club declared that the UK economy is “on the mend” and will see strong growth in the next three years on the back of rising consumer spending, house prices and business investment.
The EY Item Club summer forecast shows gross domestic product growth of 1.1 per cent this year, 2.2 per cent next year and 2.6 per cent in 2015 far outstripping the forecasts of the Office for Budget Responsibility. The OBR predicts growth of 0.6 per cent this year, just 1.3 per cent next year and 2.3 per cent in 2015.