Rush to buy vacuum cleaners boosts UK retail sales in August

Retail sales rose by 0.4pc in August compared with July, according to the Office for National Statistics (ONS). On an annual basis, sales climbed 3.9pc, marking the 17th consecutive annual increase. "The underlying picture is one of growth," the ONS said in a statement.

Statisticians said sales volumes at electrical appliance stores increased by 10.3pc on an annual basis, while the amount spent rose by 6.4pc. "Feedback from retailers suggested that sales were increased as consumers sought to buy high powered vacuum cleaners before the EU energy saving regulation came into force at the end of August," the ONS said.

Analysts said Britain's buoyant housing market was the main driver behind the increase, which made consumer spending, which powers around two-thirds of UK output, vulnerable to changes in the market.

"Household goods sales are posting double digit annual growth. That is 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," said Alan Clarke, a strategist at Scotiabank. "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."

The ONS also noted that prices in stores were falling, driven by falling petrol prices. Average store prices fell by 1.2pc in August compared with a year ago, representing the largest fall since July 2009. petrol prices were down by 5pc, while food stores fell by 0.1pc, representing the first annual fall since December 2004.

Declining food prices were the main driver behind last months fall in inflation, which eased to 1.5pc in August, from 1.6pc in July. Analysts expect prices to fall further in the coming months amid an ongoing supermarket price war and oversupply in Europe as a side-effect from restrictions on exports to Russia.

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