World Cup boosts retail figures

STRONGER than expected retail figures have strengthened calls for the Bank of England to consider raising interest rates.

But business leaders have warned that the economy remains fragile and urged the Monetary Policy Committee to take a cautious approach.

New retail figures from the Office for National Statistics published yesterday showed the value of retail sales in June rose by 2.5% compared to the same month last year while the volume of sales rose by 1.3%.

David Kern, Chief Economist at the British Chambers of Commerce (BCC), said: “These figures were stronger than expected, although they may have been artificially inflated by World Cup related spending.

“Taking the data for the second quarter as a whole, we expect the Q2 GDP estimate to show an improvement in the pace of growth.

“While the recovery in consumer spending is welcome, there is no room for complacency. The economy is still weak, businesses are struggling, and the full impact of the emergency Budget’s austerity measures are yet to take effect.

“Risks of a setback remain serious and it is important for the MPC and the Government to concentrate on supporting business growth and the fragile recovery.”