British retail sales rose more than expected in October and at their sharpest pace in three months.
The Confederation of British Industry said 37% of firms in its monthly distributive trades survey saw sales rise in October while 26% reported they fell, giving a balance of +11. That was well above the one and a half year low of -9 the balance hit in September and retailers' own expectations last month of -4.
But the CBI cautioned that growth was still below normal for the time of year and that the underlying trend was still downwards and said the Bank of England should hold off from raising interest rates.
'An interest rate increase in November would be damaging and there is no need for the BoE to consider a further rise for the forseeable future,' said John Longworth, chairman of the CBI's survey panel.
But as the CBI survey shows, it may still be too early to write off the resilience of the British consumer, particularly if retailers stand ready to cut prices.
A separate report by the British Retail Consortium today showed that shop prices in October were 1.37% lower than a year earlier, the steepest decline in the survey's history. Official data have also shown retail sales still rising rapidly, perhaps at the expense of shops' profit margins.
