UK retail sales show biggest jump in over three years - BDO

LONDON (Reuters) - British shops enjoyed their biggest jump in sales in more than three years in September, a survey of the retail sector showed, suggesting consumers are finding ways to cope with the squeeze on their incomes.

Accountancy firm BDO said on Friday its High Street Sales Tracker found overall like-for-like store sales rose by an annual 2.9 percent, adding to a smaller rise in August.

However, the increase was distorted by weak sales in September 2016, suggesting underlying growth remained slow.

Britain's economy slowed sharply in the first half of 2017 as the rise in inflation since last year's Brexit vote and modest pay growth squeezed spending power for households.

The Bank of England expects consumer demand to pick up. It said three weeks ago that most of its policymakers believed a first interest rate hike in a decade was likely to be needed in the coming months, if inflation pressures continued to build.

"Two consecutive months of positive growth will be a welcome relief for retailers following challenges seen in autumn in prior years," Sophie Michael, head of retail and wholesale at BDO, said.

Last week, the Confederation of British Industry said retail sales growth hit a two-year high in early September.

(Writing by William Schomberg, editing by Andy Bruce)