Retail sales
Surprising retail sales figures show people still spending on high street despite downturn (Reuters)

Retail sales in Britain have grown despite the downturn - rising by 1.2 percent in a month.

The rise in sales volume, excluding fuel, is much higher than anticipated by economists.

Richard Driver, an analyst for Caxton FX, described the figures as "staggeringly strong".

"[They have] caught the market completely offside," he said.

"There was a minor clue from the improved UK consumer confidence figure earlier in the week. However, high street sentiment remains at historically very low levels and nobody saw this coming.

"Some fairly sharp recent declines in UK inflation will have played a part but wage growth has been poor and household incomes remain tightly squeezed, so this is a genuine upside surprise."

He echoed the recent caution of the Bank of England that while this is welcome news, the eurozone crisis still threatens any UK economic success.

A survey at the end of January by the Confederation of British Industry suggested that many retailers were actually suffering a drop in sales at the start of the year.

Inflation fell to 3.6 percent in January, giving some relief to households.

The country is still suffering, however, with unemployment at a 17-year-high and the last set of GDP figures show that the UK economy is in reverse.