Retail sales in UK rise unexpectedly

Retail sales unexpectedly rose last month as shoppers took advantage of aggressive price cuts to stock up on new clothes, books and CDs in the post-Christmas sales, official data showed yesterday.

The Office for National Statistics said sales rose 0.7 per cent last month and by 3.6 per cent on the year. Analysts had forecast a monthly fall of 0.1 per cent.

On a three-monthly basis, sales were up 1.5 per cent, the highest rate since May last year.

The figures suggest that consumer demand is holding up but are unlikely to stand in the way of any further monetary stimulus from the Bank of England, which expects a sharp deterioration in the economy over this year.

The ONS said the main drivers of sales last month were the "textiles, clothing and footwear" and "other stores" categories after widespread discounting.