High Street sales remain buoyant

Rate rises have done little to cool spending so far

UK retail sales rose again last month, official figures have shown, adding to the pressure for higher interest rates.

The Office for National Statistics (ONS) said sales volumes increased by 0.3% in April, giving an annual growth rate of 6.1%.

Sales growth in the February to April period was 1.6% compared with the previous three months.

The fastest increases came in sales of clothing and electrical goods retailers, the ONS said.

Shoppers undeterred

The sales figures were in line with expectations and, despite a drop in the annual growth rate from March's figure of 6.5%, analysts said they increased the likelihood of further interest rate rises.

"The figures confirm the already widespread views that interest rate increases have so far had minimal impact on consumer activity," said Philip Shaw at Investec.

"The main message is that the trend is much stronger than the Monetary Policy Committee (MPC) is comfortable with and suggests a further increase next month."

On Wednesday, the minutes of the Bank of England's rate-setting MPC meeting in early May revealed that the nine-member panel had discussed raising rates by a half percentage point to 4.5%.

They elected for a quarter point rise to 4.25%, but the fact that a bigger rise was discussed signalled to many economists that the next rate rise may come sooner rather than later.