Optimism among British retailers is at its highest for more than six years as the High Street builds on the momentum of the warmer weather and World Cup, the CBI said today.
According to the business group's distributive trades survey, a 45% balance of UK retailers predict stronger sales next month, the best since June 2004.
A far higher than expected 33% balance also reported stronger sales volumes in July, the best outturn since April 2007, with grocers, clothing and footwear stores leading the way.
Early discounts have boosted the high street while wealthy Middle Eastern shoppers are likely to boost London takings in the weeks before the Ramadan festival begins on August 11.
The survey measured sales between June 23 and July 14, and covered 131 companies. It comes after official figures for June's retail volumes also showed a higher than expected 0.7% rise over the month.
The CBI's head of economic analysis Lai Wah Co said the optimism among retailers was "promising" but added: "We still expect the recovery in overall consumer spending to be fairly restrained, however, given concerns about the impact of public spending cuts and weak prospects for real take-home pay in the coming year."
High street spending is likely to take a further dent next January when VAT is hiked to 20% as part of Chancellor George Osborne's deficit-tackling measures.
IHS Global Insight's Howard Archer added: "The suspicion remains that further out consumers are likely to find life hard and will be constrained in their spending ... households already face high unemployment, muted earnings growth, elevated debt levels and high fuel prices.
"There is also the possibility that the Bank of England could raise interest rates before the end of the year due to heightened inflation concerns."