LONDON - Retail sales rose more than expected in November as Internet shopping surged at its fastest rate in more than a year, suggesting consumer demand is still holding up in the face of a housing market slowdown.

Sales rose 0.4 percent last month, the Office for National Statistics said on Friday, twice the rate predicted by analysts, putting them up 4.4 percent on the year.

The rise was driven entirely by food stores and the non-store retailing and repair category which includes specialised internet retailers.

The latter rose by a whopping 5.9 percent on the month -- the biggest jump since August 2006 -- in a sign that high street stores complaining about poor demand may simply be losing market share to online retailers.

Prices on average, for the whole retail sector, were 1.3 percent lower than a year earlier, indicating that retailers are being forced to discount their wares to move stock.

The Bank of England cut interest rates earlier this month to shore up demand and is widely expected to do so again in the next few months. These figures may, at the margin, argue against a January move.

"I don't think anybody's going to get hugely more optimistic about next year but spending is holding up better than it might have done," said Ross Walker, economist at RBS.