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Last Updated: Thursday, 16 November 2006, 09:46 GMT
UK retail sales in surprise surge
Consumers account for more than a third of UK economic activity
British retail sales rose more than expected in October, increasing at their fastest pace in almost a year, official figures have shown.

Sales jumped 0.9%, three times more than analysts forecast, and the biggest monthly gain since November 2005, the Office for National Statistics said.

The monthly rise took the annual rate of growth up to 3.9%, from a downwardly revised 3% in September, it said.

The figures suggest consumers are still spending despite higher interest rates.

'Happy retailers'

Sales growth was seen across all sectors of the retail economy except for food, where they dipped by a monthly 0.2%.

Clothing sales increased by 1.9%, the strongest growth since February, and confounding some concerns that last month's warmer than average weather would dampen the sector.

Analysts have hailed the latest figures as excellent news for the UK High Street ahead of the key Christmas trading period.

"Despite the climate of rising interest rates and squeezed household bills, the buoyant housing market, the fastest expansion of the labour force in 20 years [courtesy of immigration], and a robust finance and business services sector are making retailers happy," said Jonathan Said, senior economist at the Centre for Economics and Business Research.

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