UK retail sales rise by more than expected in August, ONS says

LONDON (Reuters) - British retail sales rose by a stronger-than-expected 0.5% in August, helped by sunny weather, but sales growth in July was revised slightly down, official figures showed on Friday.

Economists polled by Reuters had mostly expected that retailsales volumes would increase by 0.3%.

The Office for National Statistics said sales volumes in July rose by a revised 0.5%, down from a previous estimate of a 0.6% month-on-month increase.

Non-food stores, especially clothing and department stores drove sales last month, the ONS said. Food sales also rose, with butchers and bakers reporting improved footfall during the month.

Compared with a year ago, sales volumes were 0.7% higher.

However, retail sales fell 0.1% in the three months to August, but at a slower rate than the 0.6% drop in the three months to July.

"This was mainly due to a poor period for non-food stores, such as antiques dealers and auction houses as well as tech stores, with fuel sales also falling," senior ONS statistician, Hannah Finselbach, said.

"These were only partially offset by increases from online and clothing shops."

Many households are feeling the squeeze from inflation which stood at 3.8% last month with food prices rising faster.

Earlier on Friday, market research firm GfK said consumer confidence dipped in September and the prospect of tax increases in finance minister Rachel Reeves' budget in November threatened to damage confidence levels further.

Recent updates from big British retailers, including Primark owner Associated British Foods and discount supermarket Aldi UK, have also shown concerns that speculation about tax rises could hit consumer spending.

Fashion retailer Next said on Thursday it expected its second-half sales growth to slow, partly blaming a weakening jobs market.

(Reporting by Suban Abdulla; additional reporting James Davey; editing by William James)