Britain spending its way to faster growth in 2015

Happy British shoppers splashed the cash in June
SALES on the high street enjoyed their highest rise in 18 months in June, as rising consumer confidence and improving disposable incomes encouraged shoppers to splash out on clothes and big ticket items.

The data, published this morning by the British Retail Consortium (BRC), is the latest evidence of booming consumer spending in the UK. It follows figures from Visa which pointed to the strongest quarter for consumer spending in five years.

Signs of looser purse strings have convinced economists to lift forecasts for economic growth in the second quarter of 2015. “We expect GDP growth to have strengthened to 0.7 per cent quarter-on-quarter from 0.4 per cent in the first quarter,” IHS economist Howard Archer said.

Simon Kirby of the National Institute of Economic and Social Research added: “The first quarter was a blip. We’re expecting a rebound in quarter two and growth of 2.5 per cent this year, driven by consumer spending.”

Total retail sales increased by 2.9 per cent compared with June last year, when sales rose by 0.6 per cent, the BRC said today.

This is the strongest growth since January 2014, excluding the impact of Easter, and compares with a 12-month average of 1.6 per cent. Like-for-like sales rose 1.8 per cent.