RETAIL sales jumped more strongly than expected in June, reversing a fall in May and helping to boost the second quarter increase, official data showed. Seasonally adjusted retail sales climbed by 2.6% in June from the previous month, producing a gain of 6.6% from the same month the previous year. It was the biggest monthly increase this year, after consumer confidence took a serious knock earlier in the second quarter on a steep slide in the rand and fears Zimbabwe’s political crisis could spill over the border into South Africa. Economists said the data reinforced expectations that demand would recover in the second half of 2000, helping to reverse a sharp slowdown in growth seen early in the year. ”Despite a reduction in disposable incomes associated with rising petrol prices, J.P. Morgan still expects retail sales to rise gradually in the third and fourth quarters,” J.P. Morgan said. Cuts in income taxes worth 1.1% of gross domestic product would help offset the dampening effect of higher petrol prices, the bank added. – Reuters