U.K. retail sales grew for a second consecutive month, led by higher department store sales in the wake of robust consumer spending, adding to signs of a consumer-led recovery.
Retail sales volume, both excluding and including auto fuel, grew 0.2 percent each in June from May, data from the Office for National Statistics showed Thursday.
Nonetheless, growth in sales volume including auto fuel was slower-than the expected 0.3 percent and below the 2.1 percent rise seen in May. Excluding auto fuel, sales grew in line with economists' expectations, after expanding 2.1 percent a month ago.
In the second quarter, retail sales including auto fuel advanced 0.9 percent from the previous three months.
There are still significant uncertainties about the prospects for consumer spending going forward, IHS Global Insight's Chief U.K. Economist Howard Archer said.
He observed that consumers remain under pressure on a number of fronts which could constrain the upside for consumer spending in the near term at least.
With real earnings continuing to fall and households eating into their savings, the sustainability of a consumer recovery remains in question, Martin Beck, an economist at Capital Economics pointed out.
The prices of goods sold in the retail sector, as calculated by the implied deflator, increased 1.7 percent in June, the biggest increase since April 2012.
Supported by promotions and clearance sales, department store sales gained 3 percent in June, the most since March 2012. The increase was partially offset by a 0.3 percent drop in clothing and footwear sales and a 0.1 percent fall in food sales.
Compared to June 2012, retail sales including auto fuel grew at a pace of 2.2 percent, which was faster than the 1.7 percent increase forecast by economists and marginally above May's 2.1 percent growth.
Meanwhile, growth in sales excluding fuel slowed to 2.1 percent from 2.3 percent. It was forecast to have increased by 1.6 percent.
For comments and feedback: editorial@rttnews.com