British retail sales rose more than expected in October and at their sharpest pace in three months but analysts said the jump would not alter expectations for interest rates to remain on hold this week.
The increase in sales, which coincided with a separate report showing rapidly-declining high street prices, allayed some fears of a retailing slowdown following five interest rate hikes since last November.
The Monetary Policy Committee of the Bank of England is widely expected to hold interest rates at 4.75 per cent on Thursday and leave them there for the remainder of the year although there is still some debate over whether rates will climb again early next year.
The Confederation of British Industry said 37 percent of firms it surveyed in its monthly distributive trades survey reported sales rose in October while 26 per cent said they fell, giving a balance of +11.
That was well above the 1-1/2-year low of -9 hit in September and retailers' own expectations last month of a balance of -4. Retailers expect sales to pick up this month, with the November expectations balance at +12.
A separate business survey conducted by the Institute of Directors showed evidence is emerging that the wider British economy is slowing.
The IoD said the balance of optimism among British executives slipped to 31 per cent in the third quarter against 40 per cent in the previous quarter.
"Our members seem to be signalling that this is as good as it gets in the current economic cycle," the IoD's chief economist Mr Graeme Leach said.