The rise in high street sales seen in January may have been a “last hurrah” before consumers cut back on spending, according to figures out today.

A third of high street retailers responding to a Confederation of British Industry (CBI) survey reported year-on-year sales volumes rose in the first half of February, while 36 per cent said they were down, giving an overall balance of three per cent of retailers reporting a sales drop.

Paul Dales, UK economist at Capital Economics, said: “February’s CBI Distributive Trades Survey suggested that the solid rise in retail sales in January may have been a last hurrah before consumers finally succumb to the negative forces of high interest rates, record debt burdens, sluggish income growth and a slowing housing market.”

However, despite belt-tightening among increasingly cautious consumers and flat retail sales, the prices of goods in the year to February increased at their fastest rate in over a decade, as many retailers felt the pressures of rising energy, food and raw material costs, the CBI said.

Out of those who responded, 55 per cent of respondents said that average selling prices were up on a year ago, while six per cent said they were down, giving a rounded balance of 50 per cent.

“As has so often been the case in recent months, the weaker news on activity was also accompanied by stronger news on inflation,” Mr Dale added.

“This supports our view that the MPC may have to let activity on the high street slow very sharply in order to keep inflation at bay.”