Retail sales enjoy World Cup bounce

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Retail sales bounced unexpectedly higher in May as shoppers splashed out on televisions before the World Cup, official figures showed today.

Consumers put looming tax hikes and recession gloom to one side to gear up for the football festival as sales volumes jumped 0.6 per cent during the month, the Office for National Statistics (ONS) said.

Household goods sales were up 1.7 per cent in May with electrical retailers reporting strong demand, the ONS added.

The figures come after a trading update from Tesco this week reporting sales of some televisions almost doubling in the run-up to the tournament.

Some retailers have tempted customers with money-off offers for trading in older sets, offering cashback for every goal scored by England and even refunding the cost of new TVs completely if Fabio Capello's team lifts the trophy for the first time since 1966.

Sales in May were also helped by a strong rise in food sales - offsetting lower clothing and footwear volumes - while the figures were also flattered by a downward revision to April's data.

Annual growth reached 2.2 per cent - the highest rate since last November - although the less volatile quarterly figures showed a more modest 1.7 per cent rise over the same period in 2009.

IHS Global Insight economist Howard Archer said retailers would be hoping for a good run from England in the tournament to boost sales further in June, although many consumers will be eyeing the impact of Chancellor George Osborne's emergency Budget next week when the World Cup euphoria fades.

He said: "Further out, it is hard to be optimistic about the prospects for consumer spending.

"Consumer confidence has been heading downwards recently, and sentiment is likely to be further pressurised by the grisly details next Tuesday of the fiscal squeeze that is on the way."