BRITISH RETAIL sales jumped at three times the rate analysts had expected in June as hot weather and early summer discounting boosted sales of clothing, official data showed yesterday.

The office for national statistics (ONS) said sales volumes rose 1.2 per cent last month, above all forecasts in a Reuters poll and more than reversing a 0.9 per cent fall in May. The annual rate rose to 2.9 per cent, its strongest this year.

Sterling rose and gilts fell on the data as investors bet the Bank of England will decide to halt its quantitative easing programme, but analysts said the data should be treated with caution. “No one should take too much comfort from today’s figures. Household retrenchment has a way to run yet, especially with unemployment rising,” said Colin Ellis, European economist at Daiwa.

Official retail sales figures have proved notoriously volatile in recent months, with official data painting a much more upbeat picture than surveys. But British retail firms also provided upbeat figures this week. Kingfisher, Europe’s biggest home improvements retailer, posted better-than-expected second-quarter sales as it grew market share, boosted by the trend for home and garden DIY and low-cost room makeovers.

Telecoms and retail group Carphone Warehouse met or just beat first-quarter revenue and customer growth forecasts, and said it was optimistic consumer markets will not suffer a fresh downturn.

The ONS said clothing sales were one of the main drivers of the June increase. Textile, clothing and footwear sales rose by 4.7 per cent on the month, the biggest gain since January. Retailers bringing forward summer sales may have played a part, with retail prices on average 6.7 per cent lower than a year ago.