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Shoppers boosted as prices drop for 13th month in a row

Britons continued to flock to the shops last month, with spending power lifted by the 13th successive month of price falls. Average prices in shops, including petrol stations, fell by 3% compared with July 2014. While fuel stations again recorded the biggest year-on-year price falls, all shops, excluding clothing and footwear, reported declines. The Office for National Statistics said the overall volume of goods bought in the month rose 4.2% on last year. Sales have now risen year-on-year for 28 months, the longest period of sustained growth since 2008. But on a monthly basis, the 0.1% increase in sales was slightly smaller than expected, causing sterling to fall for the first time for three days. Simon Wells, chief UK economist at HSBC, said the underlying message, particularly with continued low levels of inflation, was of 'sustained growth in spending through the rest of the year'. Paul Hollingsworth of Capital Economics said the slowing growth was 'nothing to worry about'. With real pay finally rising and unemployment low, he was 'upbeat about the prospects for the consumer recovery over the rest of this year'.

 

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