Retail sales bounced back last month, official figures show, fueled by summer discounts and excitement around major sporting events such as the European football championship.

Sales volumes rose 0.5 per cent in July, according to Office for National Statistics (ONS) data. The figures are a recovery from a sales slump which retailers blamed on uncertainty ahead of the general election and poor weather.

Liz McKeown, ONS director of economic statistics, said: “Retail sales grew in July led by increases in department stores and sports equipment shops, with both England’s football team’s run to the final of the Euros and discounting across many stores boosting sales.

“These increases were offset by a poor month for clothing and furniture shops, and falling fuel sales, despite prices at the pump falling.”

Sales volumes were 1.4 per cent higher compared with July 2023, when heavy rain kept shoppers away from high streets. Despite the rise, volumes are still 0.8 per cent lower than pre-pandemic levels. The latest ONS figures also highlight the affect of inflation with consumers spending 18.5 per cent more in return for 2 per cent less goods.

The retail figures are further evidence of UK economic revival following GDP data suggesting that economic growth remained strong in the three months to June, which came after a solid rebound in the first quarter from last year’s technical recession.

Kris Hamer, of the British Retail Consortium, said: “Following the gloomy start to summer spending, retailers welcomed the warmer July weather which gave sales growth a boost, particularly in areas such as cosmetics, clothing, footwear, and books as consumers prepared for their summer holidays. Computing also sold well as people upgraded their home office tech purchases. Meanwhile, homeware and furniture performed badly, as people concentrated their spending on summer experiences.

“The high cost of living is still bearing down on consumers, but with interest rates finally easing, retailers are hopeful that this will buoy consumers’ confidence, and with it greater spending, particularly as we head into August.”

Thomas Pugh, economist at RSM UK, added: “The rise in retail sales volumes is encouraging and suggests that rising real incomes and improvements in confidence are feeding through into sales. Indeed, sales volumes are up by 4.4 per cent since December, but significantly below pre-pandemic levels.

“We are optimistic that sales volumes will improve over the next eighteen months. So far, the economic recovery in the first half of this year has been driven by government spending and investment, while consumer spending is still relatively muted. But that should change over the rest of this year.

“Rising real incomes will put households in a much better financial position and growing confidence and falling interest rates means they are more likely to spend rather than save that increase in incomes.”

Tom Youldon, of consultants McKinsey, said the strong retail performance was driven by the start of summer sales and the biggest Amazon Prime Day on record appealing to value-conscious shoppers and encouraging discretionary spending on summer staples like holiday clothes and barbeques.

“With sales volumes increasing across most categories, many retailers will be cautiously optimistic. Fragile consumer confidence may be lifted as inflation continues to hover close to the 2 per cent mark and the first cut to interest rates since 2020 starts to feed through to household budgets. While milestone events like the return of Taylor Swift’s Eras Tour and the final bank holiday could also give retailers an opportunity to deliver value, drive engagement and increase conversion with carefully planned promotion strategies,” he added.

Separate figures show that consumer confidence is also growing, rising to its highest in nearly three years last month as shoppers said their finances had improved and they were more willing to make big purchases.

However, recent reports from UK retailers have been mixed. Clothing retailer Next reported better-than-expected second-quarter sales and raised its full-year profit outlook.

By contrast, luxury brand Burberry warned on profit, and other UK retailers have highlighted continuing low consumer confidence around more discretionary purchases.