UK retail sales rose more than expected in June driven by warm weather which prompted consumers to increase their spending.
Most recently, the Office for National Statistics (ONS) reported total retail sales rose 0.7% in June from a revised 0.1% in May, and missed expectations for a 0.2% rise.
Meanwhile, on an annual basis, retail sales contracted by 1.0% compared to expectations for a 1.5% drop.
As a result, it can be seen that UK consumer spending remained resilient in June despite being weighed down by inflation and higher interest rates by the Bank of England (BOE).
A pick-up in retail demand has offset optimism about lower inflation in June as higher consumer spending could prompt firms to raise prices of goods and services again.
Following that, investors restored expectations for the BOE to implement a 50 basis point hike at the policy meeting on August 3.
However, the easing inflation data caused investors to remain divided on whether the central bank will raise rates by 25 basis points or 50 basis points.
The pound currency jumped momentarily at 1.2900 against the US dollar as an initial reaction to the release of the data.
