Spending frenzy hits the High St

Britain is caught up in a spending frenzy, with new figures today showing high street sales have surged to their highest level for two years.

More than £17.1billion was splashed out by shoppers last month - four times more than City analysts had expected. The retail rush was on a par with that seen at the Millennium, as sales leapt by 1.7 per cent in a month.

City experts fear the bonanza could force the Bank of England to raise interest rates in the next few months to slow the spending boom, amid fears that it could push up inflation.

David Page, an economist for stockbroker Investec, said the figures were "quite incredible", and added: "This increases the chance of the Bank moving much sooner on interest rates than otherwise thought."

Most April spending was on clothing, according to the figures from the Office for National Statistics. Overall, shoe and clothing stores reported a spectacular 17 per cent rise in spending - the biggest increase since records began in 1986.

Shopping is also being fuelled by low prices, with strong competition between the big stores. With interest rates at a 40-year low and consumers able to obtain credit cards with ease, there has been little incentive to curb spending.

Consumer behaviour expert Dr Helen Woodruffe-Burton, of Lancaster University, said she believed many people were spending to cheer themselves up.

"We have had a depressing winter, with 11 September and the death of the Queen Mother. There is also evidence that in the run-up to to World Cups, spending on the high street soars. And now the weather is starting to change, people are buying summer clothes. Women fed up with football may be spending on themselves."

Sir Edward George, Governor of the Bank of England, has warned the cost of borrowing will have to rise from four per cent if consumer spending fails to moderate.

By George, what a year at M&S
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