British retail sales growth eased in March after a strong rise in February, while prices picked up at their strongest rate in six months, official data showed today.
The Office for National Statistics said sales rose 0.3 per cent on the month, less than the 0.5 per cent forecast by analysts, putting them up 4.8 per cent on the year.
February retail sales volumes were revised up to show 1.6 per cent growth from 1.4 per cent - the strongest monthly gain in more than two years.
The figures did little to alter expectations the Bank of England will raise interest rates to 5.5 per cent next month, especially given rising price pressures on the high street.
Investors had rushed to bet that interest rates will rise to 5.75 per cent this year after data this week showing inflation rising to its strongest rate since comparable records began a decade ago.
Sterling pared gains after the retail sales figures, and there are signs higher borrowing costs may be starting to weigh on the economy, with consumer spending likely to contribute less to first-quarter growth than in the last quarter of 2006.