U.K. retail sales rebounded in the second quarter of the year, making a positive contribution to economic growth, data showed, signaling that Britons returned to stores despite the ongoing squeeze on their wallets.
Stronger consumer spending bode well for the largely domestic-driven U.K. economy, which slowed sharply in the first quarter of the year as shoppers pared back spending amid accelerating inflation.
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Retail sales rose by 1.5% in the April-June period, making a positive contribution of nearly 0.1 percentage point to second-quarter economic growth, the Office for National Statistics said Thursday.
This compares to a quarterly decline of 1.4% seen in the first three months of the year, which subtracted just under 0.1 percentage points from economic growth. Retail sales account for some 5% of Britain's economy.
In monthly terms, sales rose by 0.6%, beating slightly the expectations of analysts polled by The Wall Street Journal. June's annual growth of 2.9% was also slightly above market expectations.
The second quarter sales were driven largely by strong sales of summer clothing, which were boosted by a warm summer, as well as fuel.
Consumer price growth--which had accelerated sharply in the wake of the pound's steep decline triggered by last year's Brexit vote--slowed unexpectedly last month, the ONS said earlier this week.
Inflation slowed to 2.6% in June, down from the near four-year high of 2.9% the previous month, driven mostly by falling prices of fuel.
Write to Wiktor Szary at Wiktor.Szary@wsj.com and Jason Douglas at Jason.Douglas@wsj.com
(END) Dow Jones Newswires
July 20, 2017 04:52 ET (08:52 GMT)