UK retail sales surged by their biggest amount in 18 months during June, with all sectors posting solid increases, official figures showed today. The office for National Statistics said retail sales in June were 1.3 pct higher on the previous month against expectations of a much more modest rise of 0.3 pct. This was the biggest monthly rise since December 2003. June's rise follows flat growth in May and 0.5 pct in April. As a result of the June increase, the annual rate rose by 1.6 pct against expectations of a 0.8 pct rise. The June rate is up on the 1.2 pct annual rise recorded in May and 2.0 pct in April. A spokesman for the statistics office said all sectors saw sales grow but noted a strong increase in department store sales as sales were brought forward from July to June. There were also solid gains in sportswear and clothing sales. Despite the improved performance in June, the underlying picture remains fragile for retailers and probably explains their continued call for lower borrowing costs from the Bank of England. Though the improvement helped retail sales in the three months to June rise by 0.7 pct from the previous three months, the highest since November 2004, the annual comparison remains disappointing. Compared with the same period a year ago, sales in the three months to June were up 1.6 pct, the lowest annual growth since February 1999. Depressing the comparison was the performance of household goods stores, which reported a 0.1 pct fall, the lowest since January 1993. Based on non-seasonally adjusted data, the average weekly value of retail sales in June was 4.68 bln stg, 1.4 pct up on June 2004 and 1.6 pct ahead of May. Meanwhile, the implied deflator for June is showing a 0.6 pct fall in prices, compared with the 1.0 pct decline recorded in May. Today's data may temper expectations that the rate-setting Monetary Policy Committee will cut its key repo rate by a quarter point to 4.50 pct at next month's meeting. Expectations of a cut mounted yesterday when it was revealed that four out of the nine rate-setters voted for a quarter point cut in the July meeting, citing diminished growth prospects.