Sales in department stores rose for the first time this year in July, the Office for National Statistics said, with data showing an unexpected rise in total retail sales in the month.
Monthly retail sales rose 0.2% – defying forecasts for a 0.2% fall – boosted by online sales.
Department stores rose 1.6%, reversing their decline through sales of clothes.
But over the three months to July, the ONS said growth in sales in all sectors was “only modest”.
In the three months to July 2019, sales increased by 0.5% when compared with the previous three months, with food stores and fuel stores seeing a decline.
That is the lowest increase this year.
Rhian Murphy, head of retail sales at the ONS, said: “Retail sales saw only modest growth in the last three months,
“Although still declining across the quarter, there was an increase in sales for department stores in July for the first time this year.
Strong online sales growth on the month was driven by promotions.”
The ONS data showed that internet sales recorded a 6.9% jump in the month – the biggest rise for three years.
Sales of household goods plunged 5.4% month-on-month in July and were down 3.3% year-on-year
Last Friday, separate data showed that the UK economy contracted in the second quarter for the first time since 2012.
Economists looked to the retail sales data for clues for the strength of the economy at the start of the third quarter.
Gabriella Dickens, assistant economist at Capital Economics, said: “The rise in retail sales in July was encouraging and supports our view that the economy has picked up in [the third quarter].
“Of course, the retail sector only makes up about 30% of total household spending.
But spending growth off the High Street appears to have remained fairly steady. So July’s figures leave us more confident that the economy avoided another contraction in Q3”.
Asian stock markets tumbled on Monday after a sharp escalation in the US-China trade war rattled investors.
On Friday, US President Donald Trump announced tariff hikes on effectively all Chinese imports to the US.
It came after Beijing said it would impose fresh duties and raise tariffs on US imports into China.
In China, Hong Kong’s Hang Seng index slid 3.2% while the Shanghai Composite gave up 1.3%.
Japan’s benchmark Nikkei 225 index dropped 2.3%. The Chinese yuan weakened to a fresh 11-year low against the US dollar. The onshore yuan was around 7.15 per dollar in morning Asian trade.
Sharp falls in the yuan earlier this month prompted the US to officially name China a “currency manipulator”
“The trade war between the US and China has escalated dramatically,” Louis Kuijs, head of Asia Economics at Oxford Economics said.
“This tit-for-tat escalation shows how unlikely a trade deal and de-escalation have become.”
How has the trade war escalated?
On Friday, the US said it would begin the process of raising tariffs on around $250bn (£203.8bn) of Chinese imports from 25% to 30%. Those hikes will be introduced from 1 October.
The US also said fresh tariffs on an additional $300bn of Chinese goods, announced earlier this month, will now be at a rate of 15% instead of 10%. The first batch of those tariffs will be introduced in September.
In a tweet, Mr Trump said he planned to order US firms working in China to move their operations back to the US. It is unclear how he could force firms to comply.
The moves came after China delivered its latest trade war strike, announcing plans to hit $75bn worth of US goods with new tariffs and hikes to existing duties.
How did we get here?
The world’s two largest economies have been locked in a bruising trade battle for the past year that has seen tariffs imposed on billions of dollars worth of one another’s goods.
Mr Trump has long accused China of unfair trading practices and intellectual property theft. In China, there is a perception that the US is trying to curb its rise.
A news report said Huawei’s workers had cooperated with various parts of China’s People’s Liberation Army on research including on artificial intelligence and radio communications.
Huawei does not have any company-sanctioned projects cooperating with China’s military and does not customize products for use by the country’s armed forces, the tech giant’s legal chief told CNBC on Thursday.
Bloomberg’s report outlined at least 10 initiatives on which Huawei employees allegedly worked with the Chinese military, including one to extract and classify emotions in online video comments.
Bloomberg’s report outlined at least 10 initiatives in the last decade on which Huawei employees allegedly worked with Chinese military units. Those included one to extract and classify emotions in online video comments, according to the report. The information was gathered by looking at publicly available research papers whose authors were identified as Huawei employees, the report said.
A spokesperson for Huawei told CNBC the company is “not aware of its employees publishing research papers in their individual capacity.”
Huawei’s founder Ren Zhengfei was a former officer in the PLA. Huawei’s critics have pointed to that fact to suggest the company has a close relationship with China’s military and government.
The U.S. government is worried that Huawei’s equipment could present a risk of China accessing user data. Washington has also warned of laws in China that apparently compel Chinese companies to help Beijing with any national intelligence work if asked.
Ren told CNBC earlier this year that the company would resist any request from Beijing for user data.
“Even if we were ordered to, Huawei would still not install back doors. If a single back door was found in even one of the countries where we operate, our sales would shrink in all of them,” Ren said.