British retail sales unexpectedly surged in August, boosting chances the Bank of England will raise interest rates for the first time in a decade at its next meeting. More downbeat news, however, came from a BoE survey which showed no sign that wages were likely to grow much more quickly, tempering a jump in sterling.
The Organisation for Economic Co-operation and Development, meanwhile, said uncertainty about Brexit meant Britain next year will suffer its slowest growth since the financial crisis. The contrasting signals underscored the challenge for the BoE which last week surprised investors by saying it was likely to raise rates in the coming months if the economy and inflation pressures strengthen as expected.
That change of gear by the BoE came despite the uncertainty about Britain's withdrawal from the European Union and mixed messages about the strength of the economy. Wednesday's official data showed a sharp pick-up in monthly sales growth in August, despite inflation pressures that have previously squeezed spending. Retail sales volumes rose 1.0 percent month-on-month, their fastest since April, to give an annual growth of 2.4 percent, both well above the highest forecasts in a Reuters poll.
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