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Retail sales across Great Britain unexpectedly increased in August, providing a positive signal for the economy as the government prepares for next month’s Budget.
The Office for National Statistics (ONS) said the volume of goods sold rose by 0.5% month on month in August, compared with analysts’ expectations of a 0.2% decline.
The increase marked a significant recovery from July, when retail sales volumes fell by 0.5%.
The ONS said the summer’s unusually warm weather contributed to stronger sales during the three months to August.
Retailers selling products including fans, air-conditioning units, sports merchandise and clothing benefited as consumers responded to the hot conditions.
Across the three months to August, retail sales volumes were 2.4% higher than during the same period a year earlier, exceeding forecasts for a 1.9% increase.
The figures provide another positive economic indicator ahead of the government's next Budget.
They follow ONS figures showing that the UK economy grew by 0.4% in July, which was also stronger than expected.
Sandra Prince, head of consumer at Lloyds, said the warm August weather appeared to delay the usual move towards autumn shopping but that retailers had still managed to maintain consumer spending.
She also said the late bank holiday weekend and back-to-school shopping were likely to have supported demand, with online sales among the areas recording a notable increase.
Department stores recorded a 1.8% month-on-month increase in sales in August, recovering from a decline in July.
The ONS previously attributed July's fall in department store sales partly to issues affecting stock availability.
Online and other non-store retailers also recorded strong growth, with sales rising by 1.7% in August.
Over the three months to August, sales through non-store retailers increased by 5.4% compared with the same period a year earlier, highlighting continued demand for online shopping.
Retailers selling alcohol and beverages also performed strongly throughout the three-month period.
The ONS said promotions, warm weather and the World Cup were among the factors that contributed to sales.
Not every part of the retail sector experienced growth.
Fuel sales fell by 1.7% in August and were down 2.5% over the three-month period.
The decline came as motorists reduced some non-essential journeys amid higher petrol and diesel prices.
UK fuel prices have risen sharply during the period of heightened conflict in the Middle East, adding pressure to household budgets.
The latest retail figures come against a backdrop of rising inflation and concerns over household costs.
The Bank of England's Monetary Policy Committee recently voted to hold the base interest rate at 3.75%, while warning that higher energy prices could add to inflationary pressures.
ONS figures showed consumer price inflation increased to 3.1% in August, up from 2.9% in July.
Andy Carlisle, consumer goods and retail lead at Accenture, said consumers were facing several pressures as the autumn approached.
He pointed to higher energy, food, fuel and transport costs as factors continuing to affect household spending.
Carlisle said consumers appeared to be prioritising everyday necessities while becoming more cautious about discretionary purchases and larger expenses.
The stronger-than-expected August retail figures therefore offer a mixed picture of the UK consumer economy: overall spending increased, but households continue to face higher living costs that could influence spending patterns in the months ahead.
Daily Dazzling Dawn will continue to follow the latest UK economic figures and their impact on households and consumers.
