MAY 1 2007 12:58h
British retail sales volumes rose at their fastest pace in three years in April, a survey showed on Tuesday.
The Confederation of British Industry said its distributive trades survey's reported sales balance rose to +44 in April from +32 in March, the strongest since May 2004 and well above analysts' forecasts for a reading of +25.
The pound rose and interest rate futures -- already pricing in two rate increases in the next few months -- pared gains as dealers bet that a rise in borrowing costs to 5.5 percent next week is a done deal.
"There is little to prevent a May rate rise," said James Knightley, economist at ING.
Retailers predicted a slight slowing in May but the overall pace of growth was expected to remain very strong, with the balance for next month's sales at +36 -- its highest since July 2004.
"Retailers were helped by buoyant Easter trading and unusually warm weather, which may have boosted sales in sectors like groceries and DIY," said John Longworth, head of the CBI survey panel.
The strong retail survey followed news earlier on Tuesday that manufacturers were raising their prices at a near-record rate.
The CBI survey was conducted between March 29 to April 18.