LONDON (Reuters) - Mortgage approvals in Britain rose to a 17-month high in July and retail sales growth unexpectedly accelerated in August, according to surveys that suggested consumers will continue to drive the economy through the second half of the year.
British banks approved 46,033 mortgages for house purchases in July, the highest number since February 2014 and up 11 percent from a year ago.
Separately, the Confederation of British Industry's retail sales balance rose to +24 in August from +21 in July and above economists' forecasts of +18.
While Britain's rebound from recession was driven by the housing market and consumer demand, the outlook for the economy increasingly hinges on wage growth to gauge the rate outlook.
Bank of England officials have said they are increasingly looking at domestic pressures to gauge the timing of the first rate increase in more than seven years, but markets have recently pushed back bets on its timing because of turmoil in Chinese markets.
A rising pound and falling oil prices have also helped keep price pressures in check in Britain, reducing the need for an imminent rate increase.
"It's when we see a further acceleration of wage growth that I think we will then see the MPC (Monetary Policy Committee)start to raise rates," Samuel Tombs, UK economist at Capital Economics said.
"The Bank of England is likely to raise interest rates when it's a bit more confident that inflation is likely to pick back up towards the 2 percent target, and recent developments have suggested that that point may be even further in the future than they previously thought."
Britain's economy grew 0.7 percent in the April-June quarter, after expanding 0.4 percent in the first quarter, according to the official preliminary estimate.
A second reading of second-quarter gross domestic product is due on Friday. Economists expect no revision.