UK retail sales volumes rose by 0.3% on a seasonally-adjusted basis in July, and the June increase was revised up from a paltry 0.1% to 0.8%, in figures published yesterday by the Office for National Statistics.

The data provided some relief amid the wider economic gloom, with the City having predicted a 0.1% fall in sales volumes last month.

The revision to the June numbers, raised hopes the 0.7% fall in UK gross domestic product (GDP) reported for the second quarter might be revised to a less steep decline of perhaps 0.4% or 0.5%.

However, this would not change the big picture of a UK economy which remained stuck in recession in the three months to June, with a third consecutive quarterly fall in output.

With the second quarter featuring an extra day's public holiday for the Queen's Diamond Jubilee, some economists had highlighted hopes of a rebound in GDP in the third quarter.

However, given respective drops in UK output of 0.4% and 0.3% in the final quarter of last year and opening three months of 2012, such a bounce-back would have to be strong to provide any hope that the economy might fare significantly better than essential stagnation over this year as a whole.

The July sales figures, while showing an increase, do not point to consumer buoyancy. Excluding sales of automotive fuel, sales volumes were flat month-on-month in July. And non-food sales, the more discretionary element of consumer spending, fell 0.5% in July as sales of clothing, footwear and textiles tumbled, with food sales up 0.4%.

Chartered Institute of Purchasing and Supply surveys have shown manufacturing output falling at its fastest pace for more than three years in July, and that the key services sector last month recorded its weakest monthly movement in activity since snow-disrupted December 2010.

These surveys signal big challenges for the UK economy as it attempts to escape from renewed recession.

Even though the June rise in sales volumes was revised up by the ONS yesterday, there was still a 0.3% fall in the second quarter. This quarter-on-quarter sales fall in the three months to June was estimated previously at 0.7%.

Surveys from the Scottish Retail Consortium have shown that the year-on-year movement in sales value north of the Border has been weaker than that UK-wide for 16 consecutive months.

SRC figures this week signalled Scottish consumers are cutting back sharply on food shopping.

The total value of Scottish retail sales in July was down 0.7% on the same month in 2011, in contrast to a 2% year-on-year increase UK-wide reported by the British Retail Consortium.

Food sales value in Scotland in July was up just 0.1% on the same month of 2011, implying a drop in volumes given inflation. Non-food sales value was down 1.5% year-on-year, the SRC figures showed.

The ONS said the July trading period for its retail sales figures covered two days of the Olympics, July 27 and 28. It added "feedback from retailers suggests there has been no impact on sales from the Games in this trading period".

Vicky Redwood, chief UK economist at consultancy Capital Economics, cited anecdotal evidence that "consumers initially steered clear of the high street when the Games began, and then returned to the shops as Team GB's medal count increased".

However, she added: "The boost from the Olympics will be short-lived and may be paid for by lower spending later in the year. Although some of the more fundamental constraints on consumer spending are now lifting, consumer confidence is still low, debt is still high and the economy is in recession. A sustained, strong pick-up in spending still looks unlikely."