Interest rates look set to rise for the second month in a row after figures showed the strongest retail sales in two years.

The CBI found that 65 per cent of retailers reported higher sales in May, with only 14 per cent saying sales were down — a positive balance of 51 per cent, the highest since April 2002.

Examining the "ocean" of household debt the FT today suggests that total borrowing nears £1,000 billion.

It warns that the scale of household debt, coupled with rising interest rates and soaring property prices, could spell trouble for Gordon Brown's hard won reputation.