Shop sales in Britain continued to fall in July following their sharp jump the month before, but the fall was less than expected, according to the Office for National Statistics (ONS).
Sales were down by 0.3 per cent on the month in July after a downwardly revised 1.2 per cent gain in June; a fall of 0.6 per cent had been predicted.
This took the annual rate of expansion to 1.8 per cent from 1.2 per cent in June, suggesting consumer spending may be stabilising.
Underlying growth in retail sales was on a gradual upward trend which may encourage expectations that the Bank of England would leave the interest rate on hold at 4.5 per cent for now, the ONS said.
A few retailers reported lower sales after the bomb attacks in London last month, but the overall effect was hard to quantify, it said.
Earlier data from John Lewis in Oxford Street revealed sales had dropped and other large department stores reported a fall-off in customers.
However, shoppers may have deserted city centres but the number of people going to out-of-town shopping malls has risen by the same amount of around 10 per cent.