UK shoppers sweep up vacuum cleaners

Britons flocked to the shops last month to buy high powered vacuum cleaners and flat-pack furniture, helping retail sales rise at a healthy pace.

Sales volumes rose 0.4 per cent between July and August and were 3.9 per cent higher than a year ago, broadly in line with economists' expectations.

Electrical appliance shops enjoyed a 10 per cent sales boost as customers snapped up high powered vacuum cleaners before they were banned by new European Union energy saving regulations, which came into force at the end of August.

The other winners were furniture shops, which reported a record 25 per cent annual surge in sales. The Office for National Statistics said retailers had attributed their good fortune to unusually strong flat-pack furniture sales.

Retail sales have risen fairly continuously for 17 months as the economy has recovered and unemployment has tumbled. Although data this week show real wages continue to fall, people have managed to spend more in the shops by saving less.

They have been helped by lower prices, partly the result of the stronger pound and subdued global commodity prices. Average store prices were 1.2 per cent lower in August than a year ago, the biggest drop since July 2009.

A brutal price war has also broken out among the UK's supermarkets. Prices at food shops such as supermarkets fell 0.1 per cent from a year ago, the first annual fall in a decade.

Samuel Tombs, an economist at Capital Economics, said the data "show that the recovery in consumer spending still has plenty of momentum despite the continued squeeze on real pay and impending interest rate hikes."

Alan Clarke, an economist at Scotia Bank, said the popularity of appliances, furniture and paint was "probably no surprise in an environment of rapid house price inflation, where people feel inclined to splash out or those moving house buy new appliances." House prices rose almost 12 per cent over the past year, official data showed this week, although there are early signs that momentum might be starting to fade.

Mr Clarke warned: "It underlines that if housing does cool off into next year then some of the buoyancy of consumer spending and hence overall growth will fade."

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