Stampede for summer fashions

A stampede to snap up the new summer fashions has fuelled the biggest spending surge in the high street since the Millennium.

The strong retail performance was driven by sales of clothes and shoes, which rose by a spectacular 4.7 per cent last month - chiming with upbeat results from a number of stores.

On Tuesday, Marks & Spencer reported a 30 per cent surge in profits. It was followed yesterday by British Home Stores, which said its profits had tripled over the past year on the back of strong sales of womenswear.

Overall spending on clothes and shoes was 17 per cent higher than a year ago, the biggest annual increase since records began in 1986. But the strong performance was seen right across the board, with the exception of food sales which fell by 0.1 per cent.

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 pretty depressing winter, with 11 September terrorist attacks and the death of the Queen Mother. There is also evidence that in the run-up to World Cups, spending on the high street grows. Perhaps it is due in some part to women, fed up with the football obsession, deciding to spend on themselves."

In the City, where economists had predicted retail business would rise by a modest 0.4 per cent, sterling jumped to a high of $1.4620 and government bond markets were clobbered as traders jacked up their predictions of higher interest rates.

However, not all analysts think a rise is in sight. "Mixed with the boom in house prices and the impressive resilience of the labour market, this produces a powerful cocktail for higher rate expectations," said Don Smith, economist at brokers Garban Intercapital. "But the trigger for higher rates will very likely be pulled by the corporate, not the household, sector."

? A record two million people are expected in and out of Britain's major airports over the Golden Jubilee break. Airport operator BAA is bracing itself for its busiest ever Bank Holiday weekend.