Wet weather hits UK retail sales
SOURCE: BBC Website
It was not just the High Street that was a washout
The wettest June on record meant UK retail sales climbed more slowly than expected by many analysts last month, official figures have shown.
Sales rose 0.2% in June, down from an increase of 0.4% in May, the Office for National Statistics (ONS) said.
On an annual basis, sales rose 3.4% in June, the ONS added.
However, analysts said that while sales growth had slowed, it was probably still too strong to deter the Bank of England from raising interest rates.
'Dismal conditions'
The ONS figures showed that supermarkets were hit particularly hard as food sales fell 1.1% in June because customers turned away from summer products as the rain and wind made barbecues and picnics less than appealing.
However, department store sales rose sharply from a year ago - which the ONS said was because summer discounting had begun earlier than in 2006.
Analysts said sales growth was still strong enough to merit higher interest rates later this year.
UK interest rates are now at 5.75%, after having been increased five times since last August to try and rein in inflation.
"Consumer demand is very strong, bank credit growth remains robust and money supply expansion is running far too fast," said David Brown of Bear Sterns.
"UK interest rates still have 6% written all over them in the next few months."
And Royal Bank of Scotland analyst Ross Walker added that "the upside risks for interest rates remain in place".
"Overall, UK consumer demand remains fairly resilient in the face of an income squeeze and dismal weather conditions."
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