An unexpected rise in retail sales in the UK in July has been reported by the country’s retailers, which is much higher than expected, boosting hopes that this will lift the economy out of recession.

According to the Office for National Statistics (ONS), a 0.3% rise was seen in retail sales volumes in July which led to an annual increase of 2.8%, which is contrary to the economists’ forecasts for a monthly fall of 0.1%.

Scotiabank economist Alan Clarke was quoted by Reuters as saying, "If you look at the (retail) trend, it’s been sharply higher for the last year and that’s no accident."

The ONS revised sales growth in June to 0.8% from a previously reported rise of 0.1%, reducing the overall decline in retail sales in the second quarter to just 0.3% when compared with the previous three months, the news agency said.

A growth of 0.4% was seen in food retailers’ sales volumes in July, whereas volumes were down 1.8% for non-food stores as compared to the previous month.

"Retail sales do correlate with one of the big services components, so there’s a good chance that all the doom and gloom for Q2 was overdone," Clarke said.

Internet sales, which now accounts for 8.5% of all retail sales excluding fuel, continued to grow strongly with sales up 14% to over £500m when compared to the previous year.

The July 27-August 12 London Olympics did not have any proved impact on retail sales from the first two days of the Games covered in the July release, though retailers were hopeful that it would boost the sales volumes, the ONS said.

An unexpected rise in inflation in July has been reported by the ONS, affecting hopes that slowing price pressures would ease the squeeze on Britons’ finances, which was due to higher taxes and rising prices.