UK retail sales increased by 0.4% in July from June, according to figures released by the Office for National Statistics (ONS).

July's retail growth is more than economists had predicted and means that the annual jump of 3.3% is the highest rate since August 2008.

Clothing and footwear sales rose 10.3% from July last year and household goods sold increased by 4.5%.

"Overall, today's retail sales figures show that consumers continue to fare better than expected during the recession," said Arek Ohanissian, an economist at the Centre for Economics and Business Research.

"As the pace of contraction slowed considerably in the second quarter relative to the first quarter, the latest statistics indicate that the economy looks set for some positive growth in the third quarter."