Retailers could be in for a better Christmas than they expected

The Office for National Statistics (ONS) said retail sales rose 0.6% on the month and 6.1% on the year.

But the figures, along with this week's inflation report, could trigger another interest rate rise in the New Year.

However, recent data from the British Retail Consortium showed a 0.2% slip in High Street sales during November.

Discounts

On a three-monthly basis, the ONS data showed retail sales were up 1.3% from September to November against the previous quarter.

The ONS figures confounded analyst expectations.

Many had expected sales to fall slightly in November as shoppers put off buying Christmas presents until December.

It is still to early to decide whether Bank of England rates have reached their peak Lena Komileva, economist

However, retailers' attempts to draw in the crowds may be behind November's unexpected rise in sales, they say.

Aggressive tactics, such as one-day discount sales adopted by stores such as Marks & Spencer, appear to have paid off.

"Price discounting has certainly accounted for much of this because the value of retail sales hasn't grown as much as volumes," said Investec economist David Page.

The figures sparked a rally for sterling as the data supported the view that it is too early to assume that interest rates have peaked.

Resilient shoppers

The Bank of England's Monetary Policy Committee has kept base rates at 4.75% for the past four months after a series of increases aimed at cooling the property market and encouraging consumers to tighten their belts.

The tactic appeared to be working during the summer when retailers reported a lull on the High Street, forcing some of them to cut prices.

In November, household goods and clothing and footwear prices were chosen for mark downs, the ONS said, which then fuelled retail sales growth.

Elsewhere, retailers reported sales growth across nearly all categories with the exception of toy retailers and sports shops.

Internet retailers in particular reported strong growth on the year, while mail order sales were down in November.

"However, there are still risks of a resumption of the underlying slowdown trend after the holiday period," said Lena Komileva, economist at Prebon Yaman.