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UK retail sales increase, uniforms boost clothing

London - UK retail sales increased in August, as purchases of school uniforms bolstered clothing. Food sales declined.

The volume of sales rose 0.2% from July, when they were unchanged, the Office for National Statistics said in London on Thursday. Excluding auto fuel, sales climbed 0.1%. Both numbers were in line with the median estimates in Bloomberg surveys of economists.

Zero inflation and the strongest wage growth in more than six years are putting money in the pockets of consumers and helping them drive the British economy.

Bank of England Governor Mark Carney told lawmakers Wednesday that interest rates may need to rise from a record low in the new year if the economy continues to improve.

Clothing and footwear rose 2.3% in August from July, the ONS said. The increase helped to offset declines at department stores and household-goods retailers. Food sales fell 0.9%, which the statistics office said reflected a greater number of people taking vacations last month.

“The figures show that growth is coming evenly from both small and large retailers,” said Kate Davies, a statistician at the ONS. “Small stores were particularly boosted in August by sales of school uniforms, while most of the growth in large stores was coming from online.”

Sales of auto fuel rose 1.3%, as prices declined 2.9% on the month, the biggest drop since January.

From a year earlier, retail sales increased 3.7% and climbed 3.5% on an underlying basis. Both measures were 0.4% higher in the latest three months. A 0.5% decline in September would leave sales unchanged in the third quarter, the ONS said.

Retail sales account for 5.6% of the British economy, which has grown for 10 consecutive quarters.

Prices, as measured by the retail-sales deflator, fell 3.3% on the year, driven by a 12.3% drop in fuel prices.

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