Retail sales are up 1.3 pct year-on-year after the official figures were released by the Office of National Statistics showing a whopping 4.4 pct increase in non-foods.

The results are in line with expectations after the BRC announced an increase in its survey to over 60 pct of retailers earlier this month.

"June's official retail sales figures suggest that consumers aren't letting concerns about the fiscal squeeze stop them spending, at least for now." said a surprised Vicky Redwood at Capital Economics.

The rise came despite an upcoming fiscal squeeze which is expected to knock-off around 8 pct from household incomes.


Looking at the figures more closely, food sales, which were up last month remained flat whilst the largest rises were seen in non-food non specialised stores at 10.3 pct, and household good stores by 6.1 pct.

The World Cup and warmer weather were said to have been key drivers in keeping food sales flat and boosting electrical sales in household good stores.

Textile, clothing and footwear also increased 6.1 pct after clearance sales and sports goods sold in higher numbers.

"Retail sales performed well in June - even if England's football team didn't - as they were lifted by the football World Cup, good weather and evidence of increased discounting by shops. Specifically, retail sales volumes rose by a very decent 0.7% month-on-month in June, while further good news saw May's gain was revised up to 0.8%. " said Howard Archer, IHS Global.

"Consequently... pointing to consumer spending making a decent contribution to GDP growth." added Howard Archer, IHS Global Insight.

The Week Ahead: Retail Sales, GDP and House Prices

The Gross domestic product, out on Friday, is likely to be higher than expected after today's retail sales.

"Indeed, the retail sales data raise hopes that GDP growth could surprise on the upside when the data are released on Friday." said Howard of IHS Global Insight.

"The strength was across the board," added Vicky Redwood.

The third and final estimate of Q1 GDP was 0.3 pct and economists are already forecasting a figure of around 0.5 pct.

A pick-up in manufacturing seen in the CBI's survey with "output growing at its fastest rate in fifteen years" is also likely to work to the upside and could see a figure as high as 0.7 pct (according to the NIESR - National Institute for Economic and Social Research).