British retail sales accelerate - survey

Retail sales rose at their fastest annual pace in nearly two years in January as the Bank of England (BoE) seems set to raise…

Retail sales rose at their fastest annual pace in nearly two years in January as the Bank of England (BoE) seems set to raise interest rates this week for the second time in three months, a survey says.

The Confederation of British Industry's (CBI) monthly distributive trades survey released today showed 53 per cent of respondents reporting sales up on a year earlier, against 15 per cent who said they were down.

That gave a balance of +38, up from +33 in December and the highest level since April 2002.

The CBI said the latest balance number might have been exaggerated by the comparison with the poor sales performance a year earlier but sales growth was also very firm in the latest quarter, rising at its fastest pace since June 2002.

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Retailers remained optimistic about sales growth in February, with the expectations balance standing at +33 per cent in this survey.

The BoE's Monetary Policy Committee starts its two-day meeting on interest rates on Wednesday and is widely expected to raise borrowing costs by a quarter-point to 4 per cent as evidence mounts the economy is expanding rapidly.

Recent data have shown the economy grew by 0.9 per cent in the fourth quarter of 2003 and even the long-suffering.