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| Discounts boost UK retail sales | Discounts boost UK retail sales |
| (10 minutes later) | |
| UK retail sales increased by more than expected in July, helped by discounted goods, figures from the Office for National Statistics have shown. | |
| Sales were up 0.7% month-on-month, marking the biggest rise since February, and more than three times above analysts' expectations of 0.2%. | |
| Sales were up 4.4% on the same point a year earlier. | |
| However, the underlying rate of growth in the three months to July fell to 1.1%, down from 1.4% in June. | |
| Rate debate | |
| Analysts said the stronger-than-expected monthly figures could restart the debate over whether there should be another rate rise to 6%. | |
| The Bank of England has increased UK interest rates five times during the past year, taking them to 5.75%, and until the past few days it was expected to raise them once more before the end of the year. | |
| But on Tuesday, a sharp fall in the rate of consumer price index (CPI) inflation to 1.9% led many analysts to predict that there would be no rate rises in the short term. | |
| The retail sales data showed that goods whose prices were reduced included furniture and electrical goods, helping raise the sale of household goods by 13.4% year-on-year - the largest rise in nearly six years. | |
| Overall sales of non-food goods rose 7.1% on a year earlier, the highest rate for three years. | |
| On the downside, the bad weather contributed to a drop in the sale of summer foods - with sales 0.8% lower than the level seen in July 2006. |