High street sales dampen rate cut hopes

Stronger high street activity than expected from the Confederation of British Industry's distributive trades survey helped to dampen hopes of an early cut in interest rates. The evidence of an upturn for retailers combined with Eddie George's remarks to the Treasury Select Committee - widely interpreted as hinting that he would oppose a cut in rates when he meets the Chancellor next Wednesday - to push gilts down by half a point.

Retail sales volumes were up in November compared with a year ago, the CBI said. The balance of retailers who said sales were up rather than down jumped to 23 per cent compared with 16 per cent in October. The CBI said it represented the largest rise in sales since April.