British retail sales unexpectedly jumped in July even as prices rose at their fastest rate in a decade, official data showed today, calling into question the scale and speed of the consumer slowdown.
The Office for National Statistics said sales rose by 0.8 per cent last month, wrongfooting analysts who had forecast a 0.3 per cent decline. That left sales 2.1 per cent higher on the year, the lowest rate since February 2006.
Sales growth was broadly-based with household goods, clothing and footwear, and other stores all reporting strong rises on the month.
Prices on average were 1.6 per cent higher than a year ago, the biggest jump since May 1998. This was driven by a sharp increase in the price of food which surged 6.2 per cent on the year - its fastest increase since March 1992.
Recent ONS retail sales data have been very volatile with a record rise in May followed by a record fall in June. The latter fall was revised to show a drop of 4.3 per cent from the previously reported 3.9 per cent fall.
Still, the data suggests that retail spending is holding up well in the face of a slide in house prices, rising unemployment and sharp rises in household bills.