Retail boom stokes interest rate fears

Figures show sales rose at their fastest monthly rate for over 20 years, up 3.5%, giving annualised sales growth of 8.1%. However, some analysts fear this growth is unsustainable and may be an indicator of poor future prospects. Retail sales were expected to fall by 0.1% in May as economic growth is slowed by rising food and fuel costs and higher interest rates. Mervyn King has already warned that pay deals need to be restrained to avoid an inflationary wage price spiral, and the latest revelation in retail sales may prompt him to act sooner than expected to curb growth. Andrew Bell...