Retail sales volumes rose 0.3 per cent on the month to give an annual increase of 2.8 per cent, compared to economists' forecasts for a monthly fall of 0.1 per cent, the Office for National Statistics (ONS) said.
The ONS revised sales growth in June to 0.8 per cent from a previously reported rise of 0.1 per cent, reducing the overall decline in retail sales in the second quarter to just 0.3 per cent versus the previous three months.
Together with significant upward revisions to second-quarter construction and manufacturing figures, the latest data increased the chance that the originally reported drop in GDP of 0.7 per cent will be revised up.
In the three months to July, retail sales growth picked up to 0.9 per cent compared to the previous three-month period.
Retailers have been hoping that visitors of the 27 July – 12 August London Olympics and a morale boost from the success of the country's athletes will have lifted sales, though there has been no broad-based evidence of that yet.