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UK enjoys unexpected increase in retail sales

RETAIL sales in the United Kingdom unexpectedly rose in January as stores attracted shoppers with price cuts, overcoming the effects of job losses and the deepening recession.

Sales climbed 0.7 percent after increasing 1.7 percent in December, the Office for National Statistics said yesterday. Economists had predicted a 0.1-percent drop, according to the median of 28 forecasts in a Bloomberg News survey. On the year, sales rose 3.6 percent.

The Bank of England is fighting to protect Britain from the threat of a decade-long depression similar to that suffered by Japan in the 1990s, Deputy Governor John Gieve said on Thursday.

Peter Dixon, an economist at Commerzbank AG in London, said: "It's a short-term boost. Retailers can't go on cutting prices forever."

Economists have questioned the reliability of sales data after the economy succumbed to the worst contraction since 1980 and retailers Woolworths and Zavvi went bust.

Statistics officials said that they were more confident about the retail data after reviewing their method of seasonal adjustment and collating further figures from December.

Last month, they said that their sales data should be treated with caution.

The statistics office uses a representative sample of about 5,000 stores weighted to include the results of both large and small retailers, officials said.

Sales at food stores fell 0.1 percent in January, while non-food shops recorded a 1.6 percent increase. Internet-only and clothing retailers led the gain, officials said.


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