British retail sales growth slowed in June after two months of strong gains in the run-up to the World Cup soccer tournament, suggesting interest rates are likely to remain on hold for the time being.
But the British Retail Consortium also said on Tuesday that while Britons shunned the shops on the days England played, the tournament continued to boost sales of televisions, sportswear and beer.
And sales in the three months to May grew at their fastest annual pace in nearly four years and the head of one of Britain's best-known retailers, Marks & Spencer, said a long period of falling shop prices may be ending.
Bank of England policymakers, who are hoping for a recovery in consumer spending, are likely to wait until World Cup effects fall out of the data before passing judgement on the overall strength of the heavily-indebted British consumer.
The BRC said like-for-like sales rose by 2.3 percent in June compared with a year ago, down from 3.6 percent in May and the weakest since a decline of 1.4 percent in March.
Total sales, which include new floor space, also grew less than the previous month, up 4.7 percent after May's 6.2 percent - that too the weakest reading since March.
"The BoE will obviously take on board this weaker survey, although it will be unlikely to affect policy immediately as the MPC will want to see how spending evolves in the aftermath of the World Cup," said Daragh Maher at Calyon.
BoE Governor Mervyn King hinted as much during a press conference after the May Inflation Report.
Indeed, the jury is still out on interest rates given that the BoE is still closely watching pay data for signs that the spike in energy prices has made its way into wages. Average earnings data for May are due on Wednesday.
Pub operator Young & Co's Brewery Plc said on Tuesday the World Cup and good weather had boosted drink sales.
But while the tournament has spawned explosive sales of flat-screen televisions, the games hit footfall in some stores. The John Lewis Partnership reported the worst Saturday of the year in mid-June, the day of England's opening game against Paraguay.
Still, the BRC said the three-month underlying trend rate showed total sales rose a solid 6.8 percent on the year, the strongest since October 2002, while like-for-like sales were 4.1 percent higher, the strongest since August 2002.
Its report followed good results on Tuesday from Marks & Spencer, which said its recovery was on track, posting an 8.2 percent rise in underlying sales over the 13 weeks to July 1.
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