The latest Distributive Trades Survey by the Confederation of British Industry (CBI) showed that UK's retail sales growth picked up in July, exceeding expectations.

According to the survey, 48 percent of retailers said that sales volumes were up in July on a year ago, while 26 percent said they were lower. As a result, monthly retail sales balance stood at +22 in July, up from +12 in June, hitting a three-month high. Economists had forecast a balance of +10.

The retail sales growth was boosted by grocery and clothing sales in particular, while orders placed on suppliers rose at a solid pace for a second consecutive month.

Looking ahead, retailers expect steady expansions in both sales and orders in the year to August, at paces similar to those seen this month, the survey said.

Anna Leach, CBI Head of Economic Intelligence, noted: "The warm summer has added a sizzle to our high streets as shoppers defied expectations, with sales growth in clothing shops and grocers driving overall performance. But while retailers expect a similar pace of growth next month, the factors underpinning their sales growth are more shaky. Although employment is strong, real incomes are falling in the wake of higher inflation, and that's expected to feed slower consumer spending growth ahead."