Evidence of surging inflation on the high street today undermined the case for an interest rate cut.

The CBI’s monthly distributive trades survey showed that the balance of retailers raising prices in the three months to November surged to a nine-year high of 42 per cent. That was up from 16 per cent in the three months to August.

It also showed that retail sales remained reasonably resilient in November.

Looking forward, the balance of retailers expecting to raise their prices over the next quarter also jumped to a nine-year high of 37 per cent in November, from 12 per cent in August.

Howard Archer, the Global Insight economist, said: “The CBI survey significantly undermines the chances of an interest rate cut next Thursday.

“Not only do the sharply higher prices balances maintain concern over companies' current pricing power, but the resilience of sales indicates that growth is currently slowing relatively gradually.”

The CBI said a net balance of 13 per cent of retailers said sales increased in November, compared with the same period a year earlier. The figure rebounded from an 11-month low of 10 per cent recorded in October.

Shoe shops, specialist food retailers and grocers were among those to perform well, the CBI said. Sales of big ticket items, particularly those linked to the housing market, fared worse.

Retailers also said they expect modest growth in the key Christmas period. The expected December balance was 11 per cent.

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