Analysts had expected a fall of up to 0.2 per cent, so were taken by surprise, and some even doubted the reliability of the data, as many had predicted that sales would fail to rise even at Christmas.
According to the ONS, the rise was mainly due to a price promotions campaign but whatever the reason, the volume of sales rose in small stores by 5.3 per cent year-on-year, which is the biggest increase since November 2004.
Smaller stores did better because shoppers have not been driving to larger, out of town shopping centre and shopping locally, according to experts. This would appear to be borne out by some chains, such as French Connection and Mothercare, not doing as well previously.
The sales figures not only driven by discounts in shops but also by strong trading in department stores and at on-line retailers, which increased by 11.7 per cent.
The news was greeted with some caution by most analysts. Howard Archer, chief UK and European economist at IHS Global Insight, said that the latest sales figures provided a "significant boost to the hope that the economy can keep growing".
However, he added that shoppers were likely to be "very cautious in their spending for some considerable time to come".
And Neil Saunders, managing director of Conlumino, a retail consultancy, said: "These figures look unbelievably positive. They are completely out of kilter with the results from the high street and yet again call into question the credibility of the ONS when it comes to reporting retail sales."
While Brian Hillard of Societe Generale said: "However welcome, I can't see this lasting. The state of the high street is bloody and downward pressure on consumers is still immense."
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