Encouraging news from the British retail sector surprised analysts, as the pound offered signs of encouragement.

This morning sterling stood at 1.4764 against the euro and 1.7654 to the dollar.

While still subdued, figures from the high street were not as negative as some had feared, easing fears of a rate cut.

The Office of National Statistics (ONS) said retail sales growth stumbled when recorded over a three month period up to September - at just 0.4 per cent - but there were signs of greater returns on the high street in the last month.

Month-on-month sales rose by 0.7 per cent - double the rate anticipated by some market observers.

Nevertheless, some analysts insisted the overall picture was one that the Bank of England would have to take notice of.

"One month's out performance does not mean the long-awaited consumer revival has arrived," Calyon market strategist Daragh Maher told the BBC.

Interest rate watchers will now be studying the actions of the Bank of England Monetary Policy Committee, particularly in light of comments made by MPC's Richard Lambert who downplayed the likelihood of rate cuts.