The Office of National Statistics (ONS) has released figures that show retail sales rose by 1% from January and by 5.5% from this time last year. The unexpected increase was attributable to higher food sales during the month.

The figures support the Bank of England’s (BoE) decision to keep interest rates on hold and that the threat of rising inflation is not going away. It also raises the question as to whether the man on the street is concerned about the credit crunch or whether it’s merely something that the boys and girls in The City get excited about.

John Lewis followed up its positive Christmas period trading performance with the news that last week saw the biggest sales drop in almost a year. A director blamed the downturn on the ‘unusually’ warm weather and not read too much into the figures as longer erm trading prospects remain positive.

The claims of warmer weather are supported by met office figures which show February temperatures being 1.2 degrees higher than average. Maybe John Lewis should expand its northern operations as its been cold enough to freeze the balls off a brass monkey up here!

After 3 months of doom and gloom figures and sales increases of just 0.3% in December, January results offered a glimmer of hope. Like for like sales (excluding new stores) rose 2.6% from January 2007. The results include food sales and are also bolstered by heavy discounting. Therefore whilst sales increased the margins earned are likely to be lower than last year.