UK retail has biggest June sales rise for six years: survey

Customers shop at a Primark store on Oxford Street in London

LONDON (Reuters) – British shops enjoyed their biggest rise in June sales in six years, a survey showed on Friday, helped by warm weather and weak numbers in the same month last year.

Britain’s economy has slowed as the rise in inflation since last year’s Brexit vote and modest pay growth have hurt consumer spending. Recent surveys have shown a sharp drop in consumer confidence.

However, accountancy firm BDO said its monthly High Street Sales Tracker found overall like-for-like sales rose 1.3 percent in June.

“This growth was off a negative base of -3.6 percent for the same month last year, but after four months with no growth, this might offer a ray of sunshine to UK retailers,” BDO said.

It said fashion sales increased 1.4 percent, while homeware sales were up 0.5 percent.

“Retailers will take heart from consumers’ willingness to spend, but there is evidence shoppers are delving into their savings which is clearly not a sustainable position,” said Sophie Michael, head of retail and wholesale at BDO.

Some Bank of England officials believe the consumer slowdown will be offset by higher exports and investment. However, two of the eight sitting monetary policy makers voted last month for a rate hike. A third supporter of a hike has since left the BoE.

Reports from retailers themselves have been mixed. On Thursday, Associated British Foods’ <ABF.L> budget fashion arm Primark reported a strong quarter of trading and last week electricals retailer Dixons Carphone <DC.L> said the consumer environment was holding up.

However, last month sofa retailer DFS Furniture <DFSD.L> warned on profit.

(Reporting by James Davey; Editing by Mark Potter)