Expectations that the Bank of England will embark on a raft of interest rate cuts are to be undermined by figures today showing high street sales were stronger than expected in January. Financial Times, Daily Telegraph, Independent

The British Retail Consortium data follow yesterday’s official report showing the price of goods leaving British factories rose 5.7% in the year to January - far exceeding market expectations and the highest annual rate of inflation since 1991.

Separately, trade figures showed import price inflation rose to 3.5% in December, up from 1.9% in November as sterling’s fall made foreign goods more expensive.

The producer price inflation figures saw money markets scale back forecasts of future interest rate cuts. Economists predicted that data due out today on consumer inflation, and tomorrow’s Bank of England’s quarterly inflation report, would also signal a slower pace of rate cuts.

That message will be reinforced if the British Retail Consortium figures prove a lasting guide to consumer sentiment. While confidence measures have fallen, shoppers still thronged to Britain’s high streets in January, the consortium’s figures showed.

Sales values were 4.9% higher in January than a year before. Over the whole Christmas period sales were 3.7% higher than a year earlier.