Retail sales up, house prices fall slows

By Fiona Shaikh and Christina Fincher

LONDON (Reuters) - Retail sales rose in June and house prices fell at their slowest rate in two years, two surveys showed on Tuesday in more signs the economy may be bottoming out after the worst downturn in decades.

But policymakers remain wary of declaring victory too soon and are still mulling over whether to expand the Bank's 125 billion pound ($201.3 billion) asset-buying programme to boost the economy.

Bank Deputy Governor Charles Bean said in a series of interviews this week that it was still early days for quantitative easing and suggested the central bank was nowhere near withdrawing the huge stimulus it is putting into the economy.

"We don't want to move too early, because we end up nipping a recovery in the bud and if you look at the Japanese example they tightened prematurely and it pushed the economy back into a downturn," Bean was quoted as saying in the Yorkshire Post regional newspaper on Tuesday.

Still, the latest surveys from the British Retail Consortium (BRC) and Royal Institution of Chartered Surveyors (RICS) will reinforce expectations that things are at least not getting any worse.

The BRC said like-for-like retail sales rose 1.4 percent last month compared with a year ago after a 0.8 percent drop in May as very hot weather boosted purchases of summer goods.

Total sales, which include new floorspace, were up 3.2 percent on the year, having risen just 0.8 percent in May.

"The heatwave helped food retailers and got customers buying outdoor goods," said BRC Director General Stephen Robertson.