Britons go on spending spree to mark royal wedding, sunshine

* Retail sales +1.3 pct m/m vs poll forecast +0.5 pct

* Yearly volumes increase biggest since April 2017

* Supermarkets say royal wedding boosted sales

* Sterling rises, gilts fall after data

(Adds details on online shopping)

By William Schomberg and Alistair Smout

LONDON, June 14 (Reuters) - British retail sales jumped for

a second month in a row in May as a royal wedding and warm

weather helped shoppers put a winter slump further behind them,

according to data that showed much stronger spending than

expected.

Thursday's figures pushed up the value of sterling as

investors took them as a sign that the economy was recovering

from a sharp slowdown in the wintry start to 2018 which put the

Bank of England off an interest rate hike.

The data also showed strong growth in online spending, which

has forced many traditional retail firms to close stores.

Overall sales volumes rose by more than all forecasts by

economists in a Reuters poll, jumping by 1.3 percent in monthly

terms and following an upwardly revised 1.8 percent bounce-back

in April, the Office for National Statistics said.

Supermarkets and other retailers said shoppers spent more on

food and household goods before the wedding of Prince Harry and

Meghan Markle in the middle of the month, the ONS said.

Brian Hilliard, an economist with Societe Generale (Swiss: 519928.SW - news) , said the

data should be weighed against weaker figures for manufacturing

and construction output in April published earlier this week.

"There is still some tension in trying to reach the

second-quarter growth of 0.4 percent that the Bank of England

predicts," he said.

In the three months to May, sales rose by 0.9 percent

compared with a 0.2 increase in the three months to April, a

period which included heavy snowstorms and unusually cold

temperatures, the ONS said.

Compared with a year earlier, sales volumes were up 3.9

percent, the biggest rise in more than a year and again above

all forecasts in the Reuters poll.

Last week, figures from British Retail Consortium and

Barclaycard suggested sales in May rose sharply.

The BoE expects consumers to feel the benefit of a fall in

inflation and rising wages after suffering a squeeze on their

spending power last year when the impact of the 2016 Brexit vote

pushed up prices sharply.

However, it held off from raising rates at its May meeting

as it waited to be sure that Britain's economy was recovering

from its early 2018 slowdown.

Data published earlier this week suggested that the recovery

has been slow - factories had their worst month in

five-and-a-half years in April and the pace of growth in wages

slowed.

The still weak finances of many households, combined with

the rise of online shopping, has hammered many retailers.

Chains such as Marks & Spencer (Frankfurt: 534418 - news) and House of Fraser

have been forced to shut stores as consumers shop online for

cheaper goods and other retailers have gone out of business.

In the latest sign of tough conditions facing retailers,

British clothing chain N Brown Group Plc said on

Thursday it was looking to close all 20 of its stores and to

move entirely online.

The ONS said the amount of money spent on online shopping

jumped by nearly 20 percent in May compared with the same month

a year earlier, accounting for 18 percent of all retailing,

excluding fuel, almost double its share of six years ago.

(Writing by William Schomberg; Editing by Janet Lawrence)