British retail sales soften in July after June World Cup boost

By David Milliken

LONDON, Aug 21 (Reuters) - British retail sales fell back as expected in July after a surge in June when hot weather boosted demand for fans and air conditioners and supermarkets offered promotions alongside the men's soccer World Cup, official figures showed on Friday.

Retail sales volumes last month dropped 0.5% from June, in line with economists' median forecast in a Reuters poll, while annual sales growth slowed to 1.6% in July from a downwardly revised 3.8%, slightly below expectations for a fall to 2.2%.

Consumer sentiment surveys suggest demand has proven robust, despite higher energy costs caused by the U.S.-Iran war, offering a boost to new Prime Minister Andy Burnham who has tried to mollify voter anger about the cost of living since taking office in July.

GfK's long-running confidence indicator, released earlier on Friday, rose to a two-year high in August – its highest since just after Burnham's predecessor Keir Starmer came to power.

Recent updates from major British retailers have revealed mixed fortunes.

Clothing retailer Next edged up its annual profit outlook for the third time this year, with sales boosted by the country's prolonged period of hot weather.

However, sportswear and fashion retailer JD Sports issued a profit warning, though it was weakness in U.S. markets, rather than in Britain, which prompted it.

(Reporting by David Milliken; Editing by Kate Holton)