LONDON (ShareCast) - (Sharecast News) - Wage inflation and easier comparatives with last year could lead to a pick-up in demand for UK retailers this autumn, according to RBC Capital Markets which has highlighted M&S and Currys as its top stock picks.

The stocks, both rated 'outperform', are currently on the broker's "best ideas list".

"Easier seasonal comps, above inflation public sector pay awards, relative political stability and falling interest rates. These are all reasons to believe that retail demand should pick up this Autumn," RBC said in a research report on Monday.

The broker said that M&S, along with sector peers H&M and JD Sports Fashion (both 'outperform'), all offer "leverage" to a potential improvement in demand for apparel later in the year.

Elsewhere in the sector, while home-related categories remain "tough", RBC said that an improving outlook for the UK housing market should be beneficial for retailers with exposure to DIY and homewares, like B&Q owner Kingfisher, Next (both 'sector perform') and B&M ('sector perform').

Meanwhile, demand for electricals has improved recently and should favour Currys despite ongoing struggles in the Nordic market.

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