Retail spend will slow in the next three months after last week's interest rate rise, but fashion will be boosted by consumers trading up to more premium product, according to the British Retail Consortium's Quarterly Trend Analysis Report.
Richard Perks, director of retail research at consultancy Mintel, said the first quarter of this year had been better than expected.
"Most people thought the recent interest rate rises would slow the market down, but it has not had that effect on the property market and consumer confidence is very high," he said. "I don't see why the quarter-point interest rate rises will make much difference."
Perks added that April was boosted by the weather and Easter. "This meant the figures may have slightly overstated how good things are, but overall the prospects are good."
He pointed to Primark's recent results, which suggested it might be suffering cannibalisation, as being "not that exciting" and a possible indicator that the value market was not as buoyant as before. "There are plenty of people trading up," Perks added.
Research by Mintel showed that consumers' attentions had shifted away from the home and DIY towards how they look and leisure pursuits. It found that the percentage of consumers looking to spend big on new clothes and shoes this year is 20%, up 4% from 2005.
UK interest rates rose to 5.5% after last week's quarter-point rise.