Retailers rang up their strongest sales growth for more than six months in January, as consumers defied the recession to adopt a “carry on spending” tactic in new year sales, a key survey suggests today.

Uncertainty over the true scale of the retreat by consumers from the high street and over the outlook for retailers will be fuelled by the much-stronger-than-expected findings from the British Retail Consortium.

In results that confound City predictions of a deep and long-lasting consumer slump, the BRC figures today indicate that the total value of sales at the shops last month was up by 3.2 per cent from a year earlier.

This marks the first spending growth recorded by the BRC survey since last September, and the strongest since a 4.6 per cent gain last May, when trading was boosted by sunny weather.

The “like-for-like” value of sales at the shops, a measure which strips out the effects of changes in the amount of retailers' floorspace, also rose by 1.1 per cent last month, the BRC reports.

The rosier-than-forecast figures will stoke debate in the City and the retail industry over how quickly and sharply consumers will curb their spending in the face of the recession and the rising toll of unemployment it has triggered.

Most City economists continue to expect consumer spending to suffer a sustained decline this year, however, and are likely to see the better high street trading reported last month as a “last gasp” from shoppers, fuelled by retailers' aggressive discounting in the January sales.

A panel of 24 economic forecasters polled by Consensus Forecasts pre- dicts an average drop of 1.8 per cent in consumer spending this year, with some analysts expecting a fall of as much as 3 per cent or more.

The BRC said yesterday that it was doubtful whether the stronger January trading could last. “These surprisingly good figures give some room for optimism. But the fundamentals have not changed. Job fears are mounting. Consumer confidence is at record lows. It remains to be seen whether January's discount-driven growth was just a blip,” Stephen Robertson, the consortium's director-general, said.

Detailed breakdowns in the survey showed a patchy performance across the high street, with the value of food sales last month pushed up by price increases after Christmas discounts for supermarket shoppers.

The value of non-food sales including clothing, footwear, household goods and health and beauty products, remained down on a year before despite big discounts.

Helen Dickinson, head of retail at KPMG, the accounting group that compiles the survey for the BRC, said: “The results are heavily skewed by food prices creeping back up again after the heavy promotional activity in December, and by a reasonably strong performance in the first week of the month — the continuation of a short-lived pick-up in spending immediately after Christmas.”

Some economists note that consumer spending power is being given some support for the moment by substantial increases in households' disposable income, driven by the falling cost of energy and fuel.

But a majority of the City expects that these trends will still not stop consumer spending falling back.

“We now expect consumer spending to drop by about 3.5 per cent in real terms this year,” Vicky Redwood, of Capital Economics, said. “Falling inflation will provide a significant boost to households' spending power, but rising unemployment and falling house prices should prompt them to save most of the money freed up.”

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