Survey says UK retail sales grew in January

British retailers had a bumper January after a disappointing Christmas, with annual sales rising at the fastest rate for eight…

British retailers had a bumper January after a disappointing Christmas, with annual sales rising at the fastest rate for eight months, the Confederation of British Industry said today.

But the soaring sales are not expected to last, with retailers forecasting annual sales to grow a little less strongly in February, the CBI's monthly Distributive Trades Survey found.

The survey was done from January 4th to 23rd and found 57 per cent of retailers reported a rise in sales volumes compared with a year ago while 21 per cent reported a fall.

This positive balance of 36 per cent was up from 16 per cent in December and was the highest reported since May 2000.

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The three-month moving average that smooths out month-to-month fluctuations in sales volumes rose to 22 - the highest since July 2000.

Retailers expect sales to rise more moderately in the year to February, with 52 per cent forecasting a rise and 20 per cent a fall. That gives a balance of 32, compared with 11 the previous month and 21 last February.

The CBI said sales of shoes, clothes, furniture and carpets did well in January after a disappointing December.

Despite the improvement, the CBI urged the Bank of England's Monetary Policy Committee to lower interest rates when it holds its monthly policy meeting next week.

Underlying inflation - which excludes the cost of home loans - is running at 2.0 per cent - well below the government target of 2.5 per cent.