Analysts predicting a rise of just 0.4% were surprised by the latest figures from the Office for National Statistics (ONS) showing a 1.1% increase compared with June - the highest month-to-month increase since February.
Overall sales volumes were 1.3% higher compared to July 2009 but this is total sales. On a like-for-like basis as reported by the British Retail Consortium Sales Monitor they were only 0.5% up.
Nevertheless, the British Chambers of Commerce (BCC) said the numbers were "particularly welcome as they come after a good figure in June, which may have been inflated by World Cup-related spending".
"The figures provide an early indication that economic growth will remain in positive territory during the third quarter of the year. However, there is no room for complacency," he warned. "The full impact of the emergency Budget's austerity measures is yet to take effect."
Richard Hyman, strategic retail adviser at Deloitte, added: "The reality remains that this is a weak market and has every chance of getting worse before it gets better."
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