According to National Statistics, UK retail sales rose by 1% between January and February, confounding City forecasts of a drop.

The City had predicted a 0.2% fall in sales, as households faced up to the prospect of a sharp UK economic slowdown and dealt with tighter credit conditions and a weakening housing market. Food sales drove February’s increase, but all categories other than household goods showed a rise in sales.

Vicky Redwood, UK economist at Capital Economics, said a flat month-on-month position in March would now leave retail sales up by 1.7% in the first quarter as a whole, compared with the preceding three months. The rise during the fourth quarter of last year was just 0.6%.