Summer heatwave sets UK retail sales alight in July

Adam Jeffery | CNBC

British retail sales rose at their fastest annual rate in over two years in July as a heatwave boosted sales of barbecue food and outdoor items, official data showed on Thursday.

Retail sales volumes jumped 1.1 percent on the month, almost twice as fast as expected to give an annual rise of 3.0 percent, the highest since January 2011.

The Office for National Statistics said feedback from supermarkets suggested the sunny weather had boosted sales of food, alcohol and clothing.

(Read more: Coldest spring in 50 years fails to deter UK shoppers)

The figures follow a raft of indicators showing Britain's economic recovery is continuing to gather steam after growth of 0.6 percent in the second quarter, double its rate in the first.

New Bank of England Governor Mark Carney has sought to reassure households, as well as businesses and financial markets, that interest rates will not be rising any time soon, potentially encouraging more spending.

In July, a royal baby and the country's sporting successes gave Britons an additional reason to splash out.

The British Retail Consortium, which represents larger stores, said last week that its members enjoyed their best July since 2006 with sales up 3.9 percent on the year in value terms.

(Read more: One in five UK shops to disappear by 2018)

Thursday's official data showed a similar pattern. Retail sales values, which unlike the volume measure are not adjusted for inflation, rose an annual 4.9 percent, the highest since March last year.

However, with inflation continuing to outstrip wage growth, economists question whether this rise will be sustainable. The measure of inflation used in the retail sales data picked up to an annual 1.8 percent in July, its fastest pace since April 2012.

The retail sector accounts for just under 6 percent of the British economy.

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