The pound dipped slightly this morning, after 24 hours in which it built on the back of encouraging retail data.

This morning the dollar stood at 1.7539 to the pound, with the euro at 1.4556.

After signs of an encouraging Christmas for retailers and positive third quarter results from Marks & Spencer, some analysts were already speculating that the sector could be set for a boost.

With the British Retail Consortium (BRC) issuing data which indicated the best Christmas period for four years, the feeling that the High Street is improving gathered some momentum.

The BRC said like-for-like sales were 2.6 per cent up in December 2005 compared to the previous year. 

"This result was on the high side of our expectations," said BRC director-general Kevin Hawkins.

However, with post-Christmas sales showing signs of a dip and also the impact incentives had on the market, many analysts are awaiting further news.