LONDON (Reuters) - British retail sales rose at their fastest annual rate in over two years in July as a heat wave boosted sales of barbecue food and outdoor items, official data showed on Thursday.
ROB WOOD, BERENBERG BANK
"Wow again. Again, again, yet again. It's hard to remember the last time a UK data release wasn't stunningly positive and we've just had another one today... What's the bottom line? The stimulus is working and uncertainty is falling rapidly as the euro zone gets back on its feet and I think those two things are driving the UK back to growth, so low interest rates, sunnier outlook and all-faithful rising house prices getting consumers out consuming.
"At the minute this is a sugar rush of low interest rates but there's a good chance it can broaden out into something more sustainable over the next year. We've been seeing manufacturing production going up, exports seem to be stabilizing as the euro zone (recovers) and productivity went up in Q2 as well, which should help real wages. Good news Britain.
"I think with yesterday's minutes, the fall in the (jobless) claimant count and this release pointing to growth significantly outperforming the Bank of England's forecasts ... it's likely unemployment will fall to the 7 percent threshold sooner than they expect."
ROSS WALKER, RBS
"Pretty good... I was surprised the consensus was so low because the surveys were pretty strong, plenty of anecdotal evidence that we were all buying air conditioners and lots of beer and ice cream.
"The key point here is, as with some of the early official data for Q3, the quarter has got off to a pretty solid start and base effects look quite supportive.
"In terms of economic growth, the Q2 pace of expansion, it looks like we will maintain that and we may even see an acceleration."
ALAN CLARKE, SCOTIABANK
"Hands up anyone that had a barbeque in July, who went out and bought a bikini and a pair of crocs. This is all about the weather.
"But joking aside, real household disposable income is negative and going down, and this is basically telling you that people are definitely feeling the feel-good factor of the Help to Buy scheme pushing up house prices.
"People are prepared to spend more than they earn. This is bad growth but I'd rather have bad growth than no growth."
PHILIP SHAW, INVESTEC
"July's retail sales numbers were decent once again. Part of the reason seems to be the hot weather in July, but nonetheless the trend has been clearly one of an upward climb in sales for quite some time now, so it bodes well for household consumption during the third quarter, and indeed recovery prospects in the economy more generally."
(Reporting by Kate Holton, Sarah Young, Paul Sandle and Olesya Dmitracova)
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