Sales fuel big shopping spree

THE High Street spending boom continued in July, all but ruling out another cut in interest rates from the Bank of England next week.

Warm weather and a later start to the summer sales gave retailers an unexpected boost, according to the latest High Street survey from the CBI.

A net 27% of retailers reported higher sales than a year ago, up from 10% in June and the fastest rate of growth since April last year.

The tills are predicted to keep ringing in August, with growth expectations at their highest since December.

Shoe shops and food shops did particularly well, but bargain hunters also snapped up household goods such as fridges and hi-fi's in the sales.

Doug Godden, the CBI's head of economic analysis, said: 'The latest cut in interest rates may have helped and consumer confidence appears to be holding up well. But this sales growth is heavily dependent on borrowing, so it remains to be seen whether it will continue at this rate over the rest of the summer.'

However, figures from the Council of Mortgage Lending soothed fears that consumers are over-extending themselves. Repossessions by mortgage lenders in the first half of the year were down 37% on a year ago, while mortgage arrears were 20% lower.

Meanwhile, the consumer sentiment barometer from Martin Hamblin GfK showed another small but steady improvement, with the confidence index edging up from minus 2 in June to minus 1 in July.