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| Strong rise in July retail sales | Strong rise in July retail sales |
| (about 1 hour later) | |
| UK retail sales rose 0.4% in July from June, taking the annual gain to 3.3%, according to figures from the Office for National Statistics (ONS). | UK retail sales rose 0.4% in July from June, taking the annual gain to 3.3%, according to figures from the Office for National Statistics (ONS). |
| The monthly gain had been expected to be smaller, following the exceptionally strong increase in June. | The monthly gain had been expected to be smaller, following the exceptionally strong increase in June. |
| The annual figure from July was the highest since May 2008. | The annual figure from July was the highest since May 2008. |
| Among the sectors doing well in July, clothing and footwear sales were up 10.3% from July 2008, while furniture and electrical goods also sold well. | |
| The strong 1.2% monthly rise for June was revised upwards to 1.3%. | |
| Sales from household goods stores were up 4.5% on the month, which was the highest since August 2006. | Sales from household goods stores were up 4.5% on the month, which was the highest since August 2006. |
| "The retail sector clearly has built up a decent amount of positive momentum, which could well last a few months more," said Vicky Redwood at Capital Economics. | "The retail sector clearly has built up a decent amount of positive momentum, which could well last a few months more," said Vicky Redwood at Capital Economics. |
| "But we remain pretty gloomy about the outlook for sales further ahead - not least because of the looming tax rises on the horizon." | "But we remain pretty gloomy about the outlook for sales further ahead - not least because of the looming tax rises on the horizon." |
| 'Huge adjustment' | |
| One of the factors likely to lead to the tax rises is the high level of government borrowing, which rose much more than had been expected in July. | |
| Public sector net borrowing totalled £8bn in the month, which was the first time the government had had to borrow money in July for 13 years, according to the ONS. | |
| July is usually a month of surplus, because of the timing of corporate tax payments. | |
| The government's overall debt now stands at £801bn, or 56.8% of the country's annual output, its highest level since at least 1974. | |
| "The worse-than-expected public sector deficit emphasises the huge scale of adjustment that the UK is facing over the next few years," said David Kern, chief economist at the British Chambers of Commerce. | |
| "While it is impossible for the government to properly tighten spending when the economy is weak and unemployment soars, a clear medium-term plan must be formulated to illustrate how the public finances will be returned to health." | |
| Other figures released on Thursday showed that mortgage lending in July was 26% higher than it had been in June. | |
| But the figure of £16bn from the Council of Mortgage Lenders (CML) was still more than a third lower than the level in July last year. | |
| The CML predicted that the housing market would slow down again later this year. |