September 18, 2014 / 8:36 AM / 5 years ago

UK August retail sales recover, driven by furniture and vacuum cleaners

LONDON (Reuters) - British retail sales growth recovered last month after stagnating in July, driven by strong sales of furniture and a rush to buy high-powered vacuum cleaners, official data showed on Thursday.

A woman carries shopping bags as she walks along Oxford Street in central London July 25, 2014. REUTERS/Neil Hall

Retail sales volumes rose 0.4 percent on the month, in line with forecasts and the strongest growth since April, after flatlining in July, according to the Office for National Statistics (ONS).

On the year, retail sales were up 3.9 percent last month, also a four-month high, helped in part by a weak performance in the same month last year. Economists polled by Reuters had expected a rise of 4.1 percent.

Britain’s consumers have been the main driver of the country’s economic recovery which began last year, helped by record low interest rates and weak inflation that has eased the pressure on their spending power.

Wage growth, however, remains weak - something the BoE has put at the centre of its debate on when to start weaning Britain off record-low interest rates.

Prices in stores fell 1.2 percent in August, the steepest decline in more than five years, as prices in petrol stations fell 5.0 percent. Prices in food stores showed their first annual fall since 2004 as supermarkets waged a price war.

The ONS said sales of furniture soared 23.4 percent year-on-year, helped by sales of desks and flat-pack furniture for students ahead of the start of the academic year.

An ONS official also a pointed a surge in sales of high-powered vacuum cleaners, as shoppers sought to beat an end-of-August introduction of European Union rules to ban the sale of high-powered appliances.

Similar bans are planned early next year for hairdryers, lawnmowers and electric kettle as the EU tries to curb energy use and greenhouse gas emissions, the official said.

A survey from the British Retail Consortium earlier this month showed surging clothing and footwear sales helped British retail sales accelerate sharply in August.

Retail sales account for just under 6 percent of British gross domestic product.

Reporting by Andy Bruce and William Schomberg

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