July retail sales were up 2.5% on a year ago but growth is “barely touching the sides” of covering the last budget’s £7 billion in new costs on the sector, bosses have warned.

The uptick in the UK’s total retail sales was against growth of 0.5% last July and the 12-month average growth of 1.9%, according to British Retail Consortium (BRC)-KPMG data.

Food sales increased by 3.9% on last July due to warm weather and a packed sporting schedule, although rising food inflation – now at 4%, according to latest BRC figures – meant increased spending was more a result of higher prices than improved demand.

Non-food sales increased by 1.4% against a decline of 1.8% last July, with figures showing fashion sold well early in the month but deteriorated as weather worsened, while homeware and indoor

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