RTTNews - British retail sales rose more than expected in June as hot weather and clearance sales boosted spending.

Retail sales rose 1.2% month-on-month in June in volume terms, the Office for National Statistics said Thursday. That exceeded economists' expectations for a 0.3% gain after a revised fall of 0.9% in May. Compared to the previous year, sales climbed 2.9%.

The official data confirm our findings that June's retail sales were boosted by sunshine, promotions and discounts. But the wholesale turnaround in consumer confidence retailers are looking for remains elusive, said Stephen Robertson, Director General of the British Retail Consortium.

David Kern, chief economist at the British Chambers of Commerce said, This is positive news that supports our assessment that the worst phase of the recession is over. However, it is too early to talk about a sustainable recovery.

Sales at food stores rose 0.7% month-on-month in June, matching the growth seen in March, the highest since October 2008. Sales at non-food stores grew 1.6%.

Within non-food stores, the largest increase was seen in textile, clothing and footwear stores at 4.7%, where the clothing sector drove the increase. Meanwhile, sales at household good stores decreased by 0.7%, which was driven by electrical goods and hardware stores.

Given uncertainty about jobs is sure to go on rising well into next year, even the sunny weather can't provide enough of a feel good factor to ease customers' nervousness about spending on big-ticket items, Robertson said.

Kern said with unemployment set to continue rising, prospects for the economy are still fragile and uncertain. Any modest sign of improvement must be nurtured at this stage. It is much too early to consider withdrawing the policy stimulus.

In the three months to May, the number of unemployed in the U.K. rose to 2.38 million. The BCC, earlier this month reaffirmed its forecast that British joblessness would peak to 3.2 million next year.

Total sales volume in the three months to June was 1.3% higher than the same period a year ago and rose 0.7% over the previous three-month period.

In terms of value, the seasonally adjusted retail sales rose 0.6% month-on-month and 2.5% on an annual basis. For the three months to June, the value of retails sales increased 1.4% year-on-year and was up 0.8% on previous three months.

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